Ruling on Barclays’ motion to dismiss the action brought by the New York Attorney General regarding Barclays’ alternative trading system (“ATS”), Justice Shirley Kornreich suggested that the AG may face substantial hurdles in proving its case, although the Court narrowly upheld the Martin Act claim as a matter of law.

The AG based its claim on statements allegedly made to ATS participants regarding restrictions on use of the ATS for certain types of high frequency trading activity, which the complaint alleged to be false.  The case raised the novel legal issue of whether New York’s Martin Act applies to these statements, which did not relate to the purchase or sale of any particular security but addressed the nature of the trading venue that might be selected for securities transactions.