Updated Tuesday, July 29, 2014 as of 10:56 PM ET
UBS Says SEC Has Been Investigating its Dark Pool Since 2012
(Bloomberg) -- UBS said the U.S. Securities and Exchange Commission has been investigating its dark pool since early 2012, the first time the Swiss bank has acknowledged the probe now in itsthird year.

The investigation concerns some features of the private trading venue that were discontinued two years ago, including “certain order types and disclosure practices,” the Zurich- based bank said in the litigation note in its quarterly report today. UBS said it has also received inquiries from the New York attorney general and the Financial Industry Regulatory Authority. It said it is cooperating with all the investigations.

UBS’s dark pool was the second-biggest by total U.S. shares traded in the week starting July 7 behind that of Credit Suisse Group AG, according to data published by Finra yesterday. Credit Suisse Chief Executive Officer Brady Dougan said last week there has been a “significant increase” in inquiries on dark pools recently and the bank is cooperating with them.

Barclays Plc is fighting allegations it lied to customers and masked the role of high-frequency traders as it sought to boost revenue at what used to be Wall Street’s second-largest private-trading venue.

UBS said it’s also among “dozens of defendants,” including broker dealers, exchanges, high-frequency trading firms and dark pool sponsors named in putative class actions pending in New York federal court, which allege that the defendants’ equities order handling practices favored high- frequency traders at the expense of other market participants. The litigation is in “very early stages,” the bank said.

Dark pools are alternative trading systems where transactions are concealed from the public. They were created as a haven for institutional investors seeking to trade large blocks of shares in secret, hoping to minimize their impact on prices so they can get a better deal on their trades.

Read more:

 

    more »
More in Regulatory/Compliance
Can Social Security benefits be seized by collectors; Key numbers to know for a successful retirement; Costly mistakes to avoid more »
Morgan Stanley agreed to pay $275 million to resolve a U.S. regulator’s claim the company misled investors in the sale of more than $2.5 billion of bonds backed by home loans. more »
Do you have the best or worst 401(k) plan; 7 deadly sins of retirement; How to avert a Casey Kasem-type drama more »
New rules will require institutional prime funds to allow NAV to float to market value. more »
After being ordered to stop calling his firm fee-only, Rick Kahler claims retribution and threatens a lawsuit. more »
The only person convicted of fraud related to a $20 billion government bail-out program, Jesse Litvak may spend almost a decade in prison for lying to his customers about mortgage-backed securities. more »
U.S. investors are used to treating money-market mutual funds as the equivalent of a checking account. That is about to change for the riskiest of the funds. more »
FINRA takes more than a year to follow up an advisor's written testimony. more »
As the Dodd-Frank law turns four years old, policymakers appear increasingly willing to revisit a key requirement that says banks with $50 billion of assets are systemically risky. more »
Regulators have closed Eastside Commercial Bank in Conyers, Ga., the 13th institution to fail this year. more »
The financial services industry and others are seeking better metrics for analyzing the economic impact of the regulatory reform law, with some saying it is hampering the recovery and having other unintended effects. more »
The banking industry is pushing back against a plan released this week by the Consumer Financial Protection Bureau to publicize more details about consumers' individual complaints about financial companies. more »
Rep. Spencer Bachus (Ala.) is the first Republican in Congress to endorse the Investment Adviser Examination Improvement Act. more »
Lists
2014 Summer Reading List for Advisors

Current Issue

The July Issue is now online!


TWITTER
FACEBOOK
LINKEDIN

Industry Events

August 10, 2014 |

September 9, 2014 |

September 17, 2014 |

September 20, 2014 |

September 28, 2014 |

Already a subscriber? Log in here