Shares in Barclays have plunged by more than six per cent after New York prosecutors sued the British bank for fraud - the latest blow to hit the scandal-hit company.
Barclays on Thursday tumbled 6.52 per cent to finish at 215 pence on London's FTSE 100 index, which ended 0.02 per cent higher at 6,735.12 points.
Prosecutors on Wednesday said Barclays had promised clients that it would protect them from aggressive high-speed trading firms in so-called 'dark pools', but at the same time took steps that benefited these firms.
"The facts alleged in our complaint show that Barclays demonstrated a disturbing disregard for its investors in a systematic pattern of fraud and deceit," Attorney General Eric Schneiderman said on Wednesday.
A Barclays spokesman said the bank was cooperating with Schneiderman, the top prosecutor for New York state.
"We take these allegations very seriously," he added.
The suit comes amid criticism that high-frequency traders skim profits from clients who order a stock at one price, only to end up paying more than the quoted amount.
This is after the high-frequency firm pushes up the price through a series of lightning-quick transactions.
Such aggressive tactics are often characterised as predatory behaviour.
"Barclays shares have plummeted five per cent, as once again investors pay the price for banking misdemeanours," said Will Hedden at IG traders.
"This is another chapter in the story of US lawmakers versus high-frequency trading, with cynics also suggesting it is part of a continued assault on European investment banks."
The fraud allegations come one month after Barclays was fined more than STG26 million ($A47.46 million) by British regulators after a former trader at the bank attempted to manipulate the price of gold.
Barclays, which was at the heart of the Libor interest-rate rigging scandal in 2012, is also facing investigations along with other major lenders over possible manipulation of foreign exchange trades.
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