Barclays Hit With Additional $150M NY Forex Fine

Moreover, Barclays ultimately used the automated last look delay to reject all foreign-exchange trades expected to favor customers over the bank, not just toxic flow transactions, the regulator said.

Not only this, when clients asked why their orders had been rejected, the bank blamed technical issues or offered “vague responses”.

Acting Superintendent Albanese said, “We are pleased that Barclays worked with us to resolve this matter”.

Barclays imposed a “hold period” – lasting just milliseconds – between receiving a order from the customer and processing it. If there was a suspicious movement in this time then Barclays could block the order.

Given the financial crash and its lengthy aftermath, it nearly goes with the territory now that new chief executives at leading banks have a baptism of fire, or at the very least take charge in highly challenging circumstances. “If any client does call up about a rejected trade…it is important that you state in any communication ‘THE TRADE WAS REJECTED BECAUSE OF LATENCY.’…DO NOT talk about P&L on trades”.

Barclays suspended its managing director and global head of Electronics Fixed Income, Currencies, and Commodities (eFICC) Automated Flow Trading (eFICC ). It set up a “Last Look” system to protect against high-frequency “flash” traders, who use super-fast computers to gain a split-second advantage on ordinary investors. The eFICC head was terminated after the agency completed its FX trading investigation.

The FT reports that the DFS is fining Barclays for allegedly seeking to gain an unfair advantage over clients through its electronic trading platform, although it is thought the volume of trades involved was far smaller than that in the earlier investigation. “DO NOT talk about P&L on trades”.

The Department of Financial Services says the misconduct concerns Barclays’ “Last Look” system.

After years of scandal, banks are still facing probes from regulators on their conduct leading up to the 2008 financial crisis and after, particularly in the US.