Courtesy of Pam Martens
In 2014 Citigroup Had Six Separate Trading Venues, Including Dark Pools
It is destined to go down as one of the greatest journalistic and regulatory failures of our time – the lack of serious attention by investigative business reporters and the U.S. Department of Justice to the glaring fact that the largest Wall Street banks continue to trade their own and each other’s bank stocks in their own Dark Pools.
Dark Pools function as unregulated stock exchanges inside the bowels of the largest Wall Street banks. Making the situation even more dicey, some of the big banks own more than one Dark Pool, raising the possibility that there could be cross-trading between those pools to artificially inflate or depress stock prices.
JPMorgan Chase owns two Dark Pools; Citigroup currently owns at least two although it owned a lot more in the past; Morgan Stanley owns three; and then there is the Dark Pool that a consortium of Wall Street banks quietly own together. That one is called Level ATS. According to Wall Street’s self-regulator, FINRA, Level ATS is owned by Citigroup, Credit Suisse, LB I Group, Merrill Lynch LP Holdings, and Fidelity Global Brokerage Group.
After being repeatedly charged with collusion, should global banks be allowed to team up on the darkest of trading markets, i.e., Dark Pools? Should felon banks like Citigroup and JPMorgan Chase be allowed to trade the stocks of their own bank? Should any Wall Street bank be allowed to trade its own stock in darkness?
Following the great stock crash in 1929, the U.S. Senate Banking Committee conducted an extensive investigation over three years into the trading structure and trading practices on Wall Street. What it found was a vipers’ nest of corruption and collusion. The Senate investigations focused extensively on the dirty dealings of “Pools,” now reincarnated as Dark Pools. The Senate found the following:
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