Goldman Sachs and Morgan Stanley facing dark pool investigations
Investment banks Goldman Sachs and Morgan Stanley yesterday admitted that US regulators were investigating their alternative trading systems, known as dark pools.
The private exchanges have come under regulatory fire in recent months, with Goldman being fined for failing to give clients the best deal on trades, and Barclays fighting accusations it lied to clients.
And regulatory filings yesterday revealed the two banks were speaking to regulators about the trading facilities.
Dark pools are intended to keep some transaction data secret.
It can help clients sell or buy large volumes of shares or other securities without alerting other market participants and changing the price.
But the opaque systems have also been accused of letting banks lie about the activity on the platforms, as little data is made public.
However, overall Goldman cut its provisions for legal costs. It now expects the range of suits and investigations it faces to cost no more than $3.2bn (£1.9bn), down from $3.7bn three months ago.