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The New York State Attorney General filed a civil suit Thursday, accusing Barclays of securities fraud for misrepresenting its LX Liquidity Cross dark pool. From the complaint:

contrary to Barclays’ representations that it “treat[s] all venues the same based on execution quality,” essentially all client orders were routed to Barclays’ dark pool first, regardless of the probability that a given trade would execute there, would execute at a favorable price, or would cause information leakage.

Any time a

The US equities market is fragmented, with dozens of dark pools and exchanges offering hidden order types. Each operator finds something to love in its own pool, but skeptical observers have questioned how much unique liquidity, or unique value of any kind, the proverbial 31st dark pool really provides.

To begin to address this question, we analyzed correlations in midpoint liquidity across two dozen trading venues. If everyone effectively has access to all the dark pools—either

Pragma’s new research note discusses some deep challenges in the buyside’s effort to understand which trading venues provide the best execution quality, and whether brokers are routing their orders appropriately. The challenge is fundamental: the data that buyside clients currently receive from their brokers regarding where orders were filled is simply inadequate for the purpose of evaluating the quality of the venues that brokers route child orders to, or the quality of brokers’ routing policies.

This