Barclays has agreed to pay an additional $150m penalty to the New York State Department of Financial Services (NYDFS) for misconduct related to automated, electronic foreign exchange (FX) trading through its ‘Last Look’ system.
As per the terms of the agreement, the bank will also terminate its global head of electronic fixed income, currencies, and commodities automated flow trading.
The regulator New York regulator in a statement said that in certain instances, Barclays used this ‘Last Look’ system to automatically reject client orders that would be unprofitable for the bank because of subsequent price swings during milliseconds-long latency (hold) periods.
Furthermore, when clients questioned Barclays about these rejected trades, Barclays failed to disclose the reason that the trades were being rejected, instead citing technical issues or providing vague responses, the regulator said.
Barclays said the civil fine will be reflected in its fourth-quarter financial results.
Together with a previous May 2015 enforcement action related to manipulation in the spot FX trading market, Barclays has now paid $635m to the New York regulator.
In May this year, Barclays pleaded guilty to conspiring to manipulate the foreign-exchange market and agreed to pay $2.4bn to various US regulatory agencies, including the NYDFS, which imposed a $485m penalty then.
Anthony Albanese, acting superintendent of the New York State Department of Financial Services, said: "We are pleased that Barclays worked with us to resolve this matter. This case highlights the need for greater oversight and action to help prevent the misuse of automated, electronic trading platforms on Wall Street, which is a wider industry issue that requires serious additional scrutiny."