Swiss banking giants UBS and Credit Suisse have confirmed that they are among a number of banks that have come under the scrutiny of a United States-led investigation into so-called ‘dark pool’ trading.
Dark pool platforms enable investors to buy and sell positions anonymously, thus shielding their trades from rivals. The secretive activity is often combined with a high-frequency trading service that employs complex computer algorithms to complete multiple transactions within fractions of a second.
The investigatory floodgates were opened last month when New York prosecutors accused British bank Barclays of unfairly boosting profits by misleading investors in its dark pool. The bank denies the charges.
Since then, UBS, Credit Suisse and Deutsche Bank have admitted that they too are under the microscope of investigations.
Credit Suisse made the revelation on Thursday when it announced its second-quarter results, saying that it is “responding to inquiries from various governmental and regulatory authorities concerning the operation of its alternative trading systems, and is cooperating with those requests”.
Last month the Financial Industry Regulatory Authority (FINRAExternal link), the body that regulates Wall Street, released a report saying that UBS, Credit Suisse and Barclays stood out as operating the largest dark pools in the US by volume of transactions.
In compliance with the JTI standards