Credit Suisse Group AG is presently engaged in talks with US regulators to settle a string of allegations of wrongdoing at its dark pool, according to a Wall Street Journal report.
Dark pools offer buyers and sellers to swap shares under a heightened veil of anonymity relative to traditional stock market trading. The practice itself has drawn the focus of many regulators in recent years given the propensity and vulnerability for misconduct under such lucid conditions.
Consequently, enforcement and legal measures by regulators has been on the uptick in recent months in a bid to combat and ultimately curb illicit activity tied to dark pool trading. It is estimated that nearly 40% of US stock trading is done via dark pools.
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Credit Suisse itself may be on the hook for a record fine, estimated in the tens of millions of dollars, pending a settlement with the New York Attorney General and the US’ Securities and Exchange Commission (SEC). A settlement will ultimately be dictated by a deal between the two sides, with no tangible timetable presently to go off of.
The paramount case against Credit Suisse involves allegations that the bank helped provided unfair advantages to select traders, whereby violating rules against the acute pricing of stocks without adequately disclosing to investors how the process worked.
Credit Suisse currently operates the largest dark pool in the United States, tapped CrossFinder. During the week of July 20, 2015 alone, the dark pool matched more than 430 million shares, according to data from the Financial Industry Regulatory Authority.