FINRA Bombshell: Biggest Wall Street Banks Are Trading Their Own Stock in Dark Pools

By Pam Martens and Russ Martens: June 2, 2014

Major business media is hot on the story tonight of which major Wall Street bank traded the most shares in their dark pool during the week of May 12 – 16. The Financial Industry Regulatory Authority (FINRA) – a self policing body on Wall Street – released detailed dark pool data for the first time today.

Thus far, the business media has overlooked the bombshell in the data: the biggest banks on Wall Street — the same ones the U.S. taxpayer bailed out in 2008 – have been making a market in their own stock inside the dark pools they own, right under the nose of FINRA and the SEC to the tune of tens of millions of shares a year if this data is typical of an average week.

This is the equivalent of Bank of America or Citigroup being a specialist in their own stock on the floor of the New York Stock Exchange.

During the week of May 12 – 16, Merrill Lynch’s dark pool is shown executing 16,246 trades in the stock of its parent, Bank of America, for a total of 8,207,150 shares. This figure represents 12 percent of the 67.8 million shares of Bank of America that traded in dark pools that week.

See our full report tomorrow.

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