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Barclays PLC’s Dark Pool Woes Deepen

The revelations about Barclays’ (LSE: BARC) (NYSE: BCS.US) “dark pool” trading venue, shocked the market and investors alike.

However, when the revelations came to light, it was unclear how much of an effect the debacle would have on the bank’s business. Only now are we starting to get a picture. Unfortunately, things don’t look good.

Losing businessBarclays

During the last few days, it has been revealed that in the week following the release of the dark pool news, Barclays lost one third of its dark pool business. Specifically, Barclays’ dark pool traded 197m shares in the week beginning June 23, the week after the New York Attorney General’s lawsuit was announced. In comparison, during the week before the announcement 312m shares were traded.

Previously, Barclays had been the second largest dark pool operator within the US. However, this slump in volume pushed Barclays down to fifth place. What’s more, it has been revealed that Barclays has lost some of its biggest clients following the scandal.

According to City sources, Deutsche Bank, Credit Suisse, Royal Bank of Canada and AllianceBernstein — the asset manager — have all stopped sending their business through Barclays.

It’s not clear yet how much of an effect this client exodus will have on Barclays’ profits.

Staff exodus

In addition to its dark pool problems, Barclays is also struggling to retain staff at its wealth management arm. Actually, most of the management team has already left, leaving the division rudderless.

The latest departure was Rory Tobin, global head of investments and solutions at Barclays Wealth. He joins chief executive, Peter Horrell who announced his decision to stand down at the beginning of June. Both managers have taken up posts elsewhere. Other staff members that have left during the past few months include:

  • Henry Fischel-Bock, head of European and UK wealth management
  • David Semaya, head of private banking for the UK and Ireland
  • Catherine Grum, a director of wealth advisory
  • Oliver Gregson, head of discretionary wealth management
  • Kevin Gardiner, chief investment officer for Europe.

And it seems as if staff morale is at an all-time low within Barclays Wealth. Indeed, a quote published in the FT, from an unnamed executive sums up the situation and goes some way to explaining the staff exodus: “…you just can’t succeed here. It’s a revolving f***ing door…”

Should you buy in?

Still, it's up to you whether you decide to buy, sell, or hold Barclays following this news. However, I'd strongly suggest you look a little closer at the company before making any trading decision.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool has no position in any of the shares mentioned.