Citigroup Inc. has become the latest bank sanctioned in a years-long crackdown on misconduct tied to dark pools, with an affiliate paying almost $13 million to settle a US regulator’s allegations that it misled customers about the presence of high-speed traders on a private trading platform.
The unit gave customers false assurances that high-frequency traders weren’t allowed on the bank’s Citi Match venue, the Securities and Exchange Commission said in a Friday statement. In fact, two of the most-active users were high-speed traders who executed more than $9 billion in orders on the dark pool, the SEC said.
Citigroup also failed to disclose that for more than two years, almost half of Citi Match orders were routed to outside trading platforms, the SEC said. The bank settled the case without admitting or denying the SEC’s claims.