Plaintiffs in dark pool case targeting Barclays suffer a blow

Maria Nikolova

A panel of judges has denied a petition for rehearing filed by Barclays’ customer Great Pacific Securities.

Bank account for FX firm

Great Pacific Securities, a Barclays’ customer, was dealt a heavy blow on Wednesday, October 24th, as the Ninth Circuit U.S. Court of Appeals nixed an attempt by the plaintiffs in a dark pool case to revive the lawsuit.

A panel, comprised of Circuit Judges Carlos T. Bea, Mary H. Murguia and District Judge Donald W. Molloy, has voted to deny the petition for panel rehearing. Judge Bea and Judge Murguia vote to deny the petition for rehearing en banc. Judge Molloy recommends that the petition for rehearing en banc be denied.

The full court has been advised of the petition for rehearing en banc and no judge of the court has requested a vote on en banc rehearing. The petition for panel rehearing and the petition for rehearing en banc are, hence, denied.

Great Pacific Securities had sought a review of a Court ruling from July this year that dismissed the case against the bank.

The case is a putative class action filed on behalf of institutional traders and brokers who claim that they fell victim to Barclays’ allegedly fraudulent scheme in operating its dark pool, Liquidity Cross (LX).

According to Great Pacific, Barclays marketed LX and other various trading tools to institutional investors as a means to avoid aggressive high frequency traders (HFTs). Great Pacific alleges that Barclays misrepresented both the number of aggressive HFTs trading in LX and its ability and intent to police LX for aggressive HFT behavior. According to Great Pacific, these misrepresentations caused institutional investors to execute trades in LX and pay higher prices on purchases, receive lower prices on sales, and pay fees to Barclays when they would not have otherwise.

In July, the panel affirmed the district court’s dismissal of the complaint but in September the plaintiffs filed a petition for rehearing en banc. They said that panel rehearing or en banc review was necessary for a number of reasons, stressing that their third amended complaint adequately pleads that the plaintiff was unaware of Barclays’ wrongful conduct, relied on the marketing materials received from Barclays, and would have behaved differently had the omitted information been disclosed.

The case is captioned Great Pacific Securities v. Barclays Capital Inc., et al (0:16-cv-56804).

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