NEW YORK, Nov. 18 (UPI) — International bank Barclays PLC agreed to a $150 million penalty over its use of the “last look” system in foreign exchange trading.
The New York Department of Financial Services announced Wednesday the bank would pay the fine and fire one employee.
On selective basis, Barclays used a trading practice allowing it to back out of a transaction at the last minute, milliseconds before an automated, computer-generated trade was completed. While the “last look” system is meant to guard a bank from electronic traders who could detect market movement, Barclays used it to reject orders which could be profitable for a client but not for the bank. It also did not advise the client of the reason for the stop in a trade, and gave only vague answers, or blamed technical issues, when questioned by clients, the regulating agency said.
The fine comes after Barclays and four other banks agreed to guilty pleas in May, and paid over $5.5 billion in penalties, to settle charges their traders manipulated the $5.3 trillion-per-day foreign exchange markets for their own benefit, cases which did not involve electronic trading.
“This case (announced Wednesday) highlights the need for greater oversight and action to help prevent the misuse of automated, electronic trading platforms on Wall Street, which is a wider industry issue that requires serious additional scrutiny,” said acting DFS Superintendent Anthony Albanese in a statement.
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