Barclays is set to be fined $70m (£49m) for misleading investors about its US “dark pool” trading operations, says the New York Attorney General’s office.
The UK-based bank has been accused of not making it clear to its clients that particularly aggressive traders, known as high frequency traders, were using the private platform.
“Dark pool” trading operations allow investors to trade large blocks of shares but keep the price private.
The bank declined to comment.
A formal announcement, including a settlement with Credit Suisse also over dark pool trading, is expected on Monday from the New York Attorney General (NYAG) and the Securities and Exchange Commission (SEC).
As well as the fine, Barclays is expected to admit to having broken the law and will agree to install an independent monitor to conduct a review of its electronic trading business, according to the NYAG.
Credit Suisse is likely to pay a penalty of $84.3m but will neither admit or deny any wrongdoing.
“These cases mark the first major victory in the fight against fraud in dark pool trading that began when we first sued Barclays,” said Eric Schneiderman, the New York attorney general.
He added that “co-ordinated and aggressive government action” had led to “admissions of wrongdoing, and meaningful reforms to protect investors from predatory, high-frequency traders”.
“We will continue to take the fight to those who aim to rig the system and those who look the other way.”
Meanwhile Andrew Ceresney, director of the SEC’s enforcement division said: “Dark pools have a significant role in today’s equity marketplace, and the firms that run these venues must ensure that they do not make misstatements to subscribers about their material operations.”
Barclays lost an attempt to have the case dismissed last year.