barclays
Barclays employees were concerned about dark pools before New York's attorney general filed suit. (Reuters)

Barclays PLC (UK:BARC) is being sued by a California client for giving certain traders unfair advantages in its "dark pool," where stocks are traded mostly anonymously. Great Pacific Securities, a California institutional broker-dealer, said Barclays gave high-frequency investors an unfair advantage in the dark pool by hiding their identity and the volume of their trading.

A complaint filed by Cotchett Pitre & McCarthy LLP says the California company is suing the bank for concealing that its system actually favored predatory traders, which would put clients at a disadvantage.

Two months ago, New York Attorney General Eric Schneiderman began an investigation into the bank’s dark pools, claiming they were designed to benefit high-frequency trading firms while the bank told clients they would be protected from exactly that.

Last week, a New York investor filed a class action lawsuit against Barclays for the loss of money she incurred due to the attorney general’s investigation into the bank’s dark pool.

According to Bloomberg, Barclays has one of Wall Street’s biggest dark pools.

This new lawsuit is Great Pacific Securities v. Barclays and will be heard at the U.S. District Court, Central District of California (Santa Ana).