jo, thank you so much. jo ling kent on the alibaba story. crude oil, it did drift lower again today after the recent runup from about a week ago that was triggered by the violence in iraq. markets are obviously weighing the potential impact of the new but small exception to the 40-year-long u.s. ban on oil exports. maybe there will be some wiggle room on that. this change allows two energy companies to begin exporting minimally processed light sweet crude. that's what we make here in the u.s. right now taking a look coming down each more by 92 cents. this is brent, actually, so if we looked at west texas intermediate, we could see at the moment that we do have west texas moving lower as well by about 89 cents too. so now that we're below 106 a barrel and everybody thought this thing would skyrocket to 108, maybe even 115 if everything went offline in iraq due to the problems there and the violence? well, not so right now. let's bring in the floor show, talk about everything that trades on the floors around the united states. new york stock exchange, cme group and the nymex. jeff grossman, i think it's interesting, we'll go to you first because we see if there are some changes in the u.s. laws, so much for higher crude oil. >> i said that to you the last few times on here. everyone kept worrying, had that knee-jerk reaction, fine. we topped out about 107.50, and then reality comes in. there's no disruption, there's, you know, steady flow here, plenty of inventory, and the market under its own weight was going to work its way lower. i'll tell you this, you can look at it as the glass is still half full if you're a bull here because we did settle above a very critical number. about 105.40 in the crude oil is really where the pivot is, and that's where we go from a down move to an up move. so right now we're still in positive territory if you want to look at it that way. i still, and i said that on the last few times, we're on our way probably in the next two to three weeks without some new news down to about $102. there's no reason for this market to make a new high unless something really geopolitical happens, that news that came out about the continent deal is definitely overall a bearish -- liz: and if it gets, by the way, folks, if it gets to 102 like jeff says, that means companies like alcoa use less money. they don't have to spend as much to use energy to do what they do, which is create things like aerospace parts. we've got the ceo coming up in just a minute to talk about that. let me get to ben willis on the floor of the new york stock exchange. looking at the markets today, i wouldn't call this a big selloff. what's at the heart of it? >> confusion on how to price the next gdp reading. the downdraft we saw in the last reading from a more severe downgrade than was anticipated now leaves the market pundits to wonder just how much of a rebound we'll have off of the polar vortex that took gdp to the negative reading that we just saw. so it's a question of whether or not we get back above the 3% realizing or you need to price the market at 3% or slightly lower. i think that's really the cross-currents we're going through at this particular time, trying to price correctly the anticipation of the next gdp reading. liz: chris, i think it's interesting to see how the bond market is behaving in light of all this news we have out there. what do you think the next major move for treasuries really is? we have viewers who have really invested in these. >> well, i think the big thing is, is we're continuing to wait and see what the fed actually does. really about a year ago we started, you know, they started easing with qe2, but until we get rates rising, i don't see that trend changing in the bonds, you know? and i think you continue to see money coming into the stock market because it's the only game in town. the bias is going to remain bullish. these black boxes and algorithms to be buying dips in the stock market because until we get rates raising, you're going to see, i think, a bid in these markets. liz: and we know that's probably not going to happen too soon simply from what we've heard from janet yellen, the chair of the federal reserve. gentlemen, thanks so much. thank you. closing bell ringing in about 51 minutes. saw that one of the biggest leaders on the s&p is alcoa. because there may very well be a brand new alcoa. it's already making a big contribution to ford's new f150 trucks with the aluminum bodies, but now it's doubling down on its aerospace business. we catch up with alcoa's chairman and ceo, klaus kleinfeld, coming up. >>> and solar city has been quite the trailblazer in the home solar panel installation business, but it does much more than that. now it's got a new acquisition under its belt and new goals, manufacturing to heat up its business. we'll find out exactly what those goals are. solar city's cofounder and ceo in a fox business exclusive. you've got to hear, they are big disresulters. ♪ ♪ means keeping seven billion ctransactions flowing.g, and when weather hits, it's data mayhem. but airlines running hp end-to-end solutions are always calm during a storm. so if your business deals with the unexpected, hp big data and cloud solutions make sure you always know what's coming - and are ready for it. make it matter. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. that, my friends, is everything. and with the quicksilver card from capital one, you earn unlimited 1.5% cash back on everything you purchase. not just "everything at the hardware store." not "everything, until you hit your cash back limit." quicksilver can earn you unlimited 1.5% cash back on everything you could possibly imagine. say it with me -- everything. one more time, everything! and with that in mind... what's in your wallet? 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[ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. one pill each morning. 24 hours. zero heartburn. frequent heartburn medicine for 8 straight years. that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. ♪ ♪ liz: we're officially five days into summer, and there you see it, the blazing sun. one company taking advantage of that summer heat? solarcity, whose chairman is none other than billionaire elon musk of tesla, of course. you may have noticed the company's trucks, they're bright green, popping up on the highways as they try to keep up with the surge in demand for its solar panels and installation. in fact, the company's residential installations grew by more than 100 percent in the first quarter year-over-year, and now it's diversifying its strategy with this month's acquisition of a u.s.-based solar panel maker. how will this transform solarcity's business? joining me now, lyndon rive, solarcity's cofounder, ceo. you look at that number, residential installations up more than 100%. people are adopting this stuff. >> yeah. i mean, they really like the product. we've made the product very simplistic. we install the system for free, and we just sell the energy. and we sell the energy at a lower cost than you can buy from the utility. so given the choice of paying more for dirty power or less for clean energy, people prefer to pay less for clean energy. liz: and just to be clear, when you have this installed, you still have about 30-40% of your energy coming from the utility companies because at night you need it, right? >> yeah. we supply 60-70% or 60-80, so they still get some energy from the utility. liz: one out of every four residential installments right now is done by you guys. i remember you when you were but young pups, 2008 we first put you on the air, a very young industry. now you're actually making acquisitions. you bought a solar module manufacturing company for about $350 million. everyone's saying you did this because tariffs are being imposed on the chinese solar panel makers because they were flooding the market and, ostensibly, hurting the industry? >> no, no. so the decision to acquire the company was nothing to do at all with the tariffs. the tariffs don't have an effect in accelerating the decision -- liz: because you were getting your solar panels from companies you were buying from. >> yeah, and we still do and still plan to buy from them. but the key thing is if we look at the future of solar and where we have to take it, we have to reduce the cost dramatically. the only way you can reduce the cost is by vertically integrating and bringing true school to the equation. liz: soup to nuts. >> yeah. how can you bring more scale to the value chain, integrate it, take out the compounding margins and get more efficiency -- liz: in a way, you're just copying the oil companies like bp and say, for example, exxonmobil which extract the oil, refine it, put it into the retail operations that sell it to you and me. >> yeah. this is an energy company, absolutely. that's the reason why we acquired it. and we think that we'll get to a point with our scale and the technology, we'll get to a point where we can provide energy at a lower rate than you can get from fossil fuels. hawaii liz if i buy a new house tomorrow, what does it cost me to have solarcity outfit it for solar? >> there is no cost, you just -- liz: there is a cost. you guys are making money. >> the cost is you pay for the energy. so our customers, if you -- let's say you're in the new york area. your cost of energy is roughly 15 cents a kill whereat hour. we'll come in -- kilowatt hour. we'll sell it to you for 13 cents. most of our customers see a savings roughly about 10-15% of their energy bill. liz: and at no point is it costing me to have you guys climb up onto the roof and put the panels on? >> there is no cost whatsoever. the only thing you pay is for the electricity we generate. there's no risk on the consumer. if the system doesn't perform, you don't pay us. liz: that's what i was going to say, repairs, things like that -- >> we fix it. we're highly motivated to make sure it works. liz: i would think. >> the partnership is actually very strong because if it doesn't work, you're not paying me, so i'm going to come out fast so you can pay me. liz: a very smart man named charlie munger, warren buffett's buddy -- and he is a republican, republicans are sometimes against solar, they feel it's getting too much from the government -- once said to us on fox business if we don't harness the wind, the sun and water, we're just stupid. you're harnessing the sun here, but where does this go in the future? because there are competitors out there. and i'm not necessarily worried about whether you can scale up and manufacture with your new company that you've acquired, but what about the competitors who look in and say we can do what solarcity does? >> you know, i'd like more competitors to enter into the space, other energy companies to get into the space, big energy companies to get into the space. we have to transform the way energy's delivered. the current way is not sustainable. if you look at the total scale, in order for us to get to a 40% penetration of renewable energy by 2040, we will have to deploy 400 gigawatts a year starting today. today the entire industry only deploys about 50. liz: i want everybody to know something. this stock, scty, went public at $8 a share, it's $71 now. over the last year it's been up 84%. we will be watching the developments. we love these kinds of innovative companies. thank you so much, it's great to see you. >> thank you so much for having me. liz: lyndon rive. fox has been covering this from the start, 2008, we will continue to. thanks, lyndon. good to see yo >>> closing bell ringing in 41 minutes. well, turning up your portfolio. we've got an exclusive interview with howardward. he's got some -- ward with. he's got some great stock picks straight ahead for you. plus, team usa loses against germany in the world cup but wins the battle to get into that knockout round of 16. a high-stakes contest for sports apparel giant nike which provides the uniforms for team usa. nike's stock right now up a fraction, but why not? we take a look anyway. the company's earnings come out after the close. we have complete coverage on "after the bell." stay tuned. ♪ ♪ when folks think about what they get from alaska, they think salmon and energy. but the energy bp produces up here creates something else as well: jobs all over america. engineering and innovation jobs. advanced safety systems & technology. shipping and manufacturing. across the united states, bp supports more than a quarter million jobs. when we set up operation in one part of the country, people in other parts go to work. that's not a coincidence. it's one more part of our commitment to america. i research. i dig. and dig some (trader more. search. because, for me, the challenge of the search... is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade, our passion is to power yours. ♪ ♪ liz: breaking news right now regarding the barclays story. yes, the breaking news is that now barclays in the wake of new york attorney general eric schneiderman's investigation and lawsuit filed against the bank yesterday about fraud, barclays now says it is undertaking internal investigations into the allegations of fraud at its dark pool. barclays ceo has brought in, quote, substantial external resources to help with the dark pool investigation. this, according to reuters, but we will get the story from the horse's mouth when we have eric schneiderman, the new york attorney general, in just about, what, 20 minutes, 15 minutes? he's coming right up. perfect timing with this new, breaking news about the story. let's look at barclays stock, ticker symbol bcs. the stock is moving now lower by seven and a third percent. earlier it was down 6%, but you can sees the continuing its march downward with all this negative news about the new investigation. >>> now, our special report tuning up your portfolio. all day long fox business decided, you know what? we're going to help you update your portfolio to meet your goals, you want to make money. with stocks apparently pausing this week from their record run, where should you put your money right now? we've got some specific ideas thanks to howard ward, gamko investor's chief investment officer of growth equities. howard, everybody just wants to make money, they want to preserve what they have but also grow it. >> that's right, liz. and i'm afraid that the stock market is the best place to continue to do that in the years ahead, because stocks are going to continue to be supported by rising earnings as well as the lack of good alternatives. cash is yielding zero, and in my opinion, bonds will have negative returns over the next several years as interest rates edge higher. liz: it's a little depressing our savings accounts aren't making any anything, but that, i assume, is your number one tip out of the gate, you've got to be in stocks. number two, what do investors need to do to tune up their portfolios going into what tends to be -- not saying it's going to be, but what tends to be a pretty slow summer area? >> well, i see the economy -- we see the economy accelerating nicely this quarter. that first quarter negative gdp number is looking in the rearview mirror. the economy is just fine. in fact, it's better than fine. and i think we're going to print 3%, possibly north of 4% for gdp this quarter. so investors in stocks should really be looking to increase the economic sensitivity of their portfolios. so in my case, i would have a large waiting in the -- weight in the consumer discretionary sector, 72% driven by consumer spending. if you're going to have an acceleration in the economy, that really requires a pick-up in consumer spending, so i would be wanting to participate in that. i'd also want to have good exposure to technology. there's a secular trend of greater spending, there's an uptrend in secular spending on technology, and finally, the industrials. the industrial names should also participate very well in an economy with strong autos, housing doing better, aircraft sales doing better with, travel, lots of things kicking in on the industrial side. capex is kicking in, infrastructure spending is kicking in. those are the three areas i would tend to emphasize. liz: okay, so am i reading you correctly that that terrible gdp of -2.9% is in the rearview mirror? >> absolutely. i would not think about it twice. forget about it. liz: okay. >> that was a weather-inflicted wound. [laughter] liz: you just pointed out, man, i just had somebody on the phone say to me the excuse of weather is a joke, but i don't necessarily think so. especially -- >> they must live in the south, yeah. liz: we see that people are buying cars now, and yet they weren't in the middle of january. okay, so that said, let's get to the stock picks that would best reflect what you just described as sector picks that work with the economy and heat up somebody's portfolio. we can begin with comcast. you also like home depot and then aig. what about comcast? because they, of course, are working on this merger with time warner cable, but what else do you like about them? >> well, of course, comcast is not only a distribution company with its cable properties, but also a content company. let's remember they also own nbc universal, and they have the pending deal with time warner cable which we do think will be allowed to proceed. this is a free cash flow machine, it has a free cash flow yield in excess of 6%. the company has pledged to have a dramatic buyback in shares at the completion of the deal to buy time warner cable. and so here's a case you have steady growth, you get some cyclical improvement on the advertising side of their business as the economy be does better. they benefit from the aereo decision by the supreme court yesterday on content side. but this is about a lot more dividend increases and share buybacks and that stream of cash flow. liz: what's home depot about? is that a recovery in the housing world play? >> well, in a sense, it sure is. home depot is going to benefit from both increased spending on remodeling of homes as well as on construction of new homes. it's a terrifically well-managed company, also has a free cash flow yield of nearly 6%, buying back stocks, raising dividends, doing all the right things from a management perspective, and you get that cyclical kicker from housing which i think is about to accelerate. liz: howard, thank you so much for joining us. >> thank you for having me. liz: howard, chief investment officer of growth equities, helping you and us tune up our portfolios. >>> closing bell ringing in exactly 30 minutes. yes, we're down, but charlie gasparino is up. he was first to report new york's prosecutor going after barclays bank over high frequency trading and its so-called dark pool. the word "fraud" is thrown in here. coming up, attorney general schneiderman joining charlie and me live in the studio to take us inside his investigation, and we will be first to be able to ask him about the breaking news that barclays is launching it own internal investigation. i guess it took a lawsuit by schneiderman to do that. >>> and alcoa wants to fly like an eagle in the aerospace business. now it's extending its wings. alcoa's chairman and ceo, klaus kleinfeld, will tell us how he's reinventing his 128-year-old company. that's next, stay tuned. ♪ ♪ my dad has aor afib.brillation, he has the most common kind... ...it's not caused by a heart valve problem. dad, it says your afib puts you at 5 times greater risk of a stroke. that's why i take my warfarin every day. but it looks like maybe we should ask your doctor about pradaxa. in a clinical trial, pradaxa® (dabigatran etexilate mesylate)... ...was proven superior to warfarin at reducing the risk of stroke. and unlike warfarin, with no regular blood tests or dietary restrictions. hey thanks for calling my doctor. sure. pradaxa is not for people with artificial heart valves. don't stop taking pradaxa without talking to your doctor. stopping increases your risk of stroke. ask your doctor if you need to stop pradaxa before surgery or a medical or dental procedure. pradaxa can cause serious, sometimes fatal, bleeding. don't take pradaxa if you have abnormal bleeding or have had a heart valve replaced. seek immediate medical care for unexpected signs of bleeding, like unusual bruising. pradaxa may increase your bleeding risk if you're 75 or older, have a bleeding condition or stomach ulcer, take aspirin, nsaids, or blood thinners... ...or if you have kidney problems, especially if you take certain medicines. tell your doctors about all medicines you take. pradaxa side effects include indigestion, stomach pain, upset, or burning. if you or someone you love has afib not caused by a heart valve problem... ...ask your doctor about reducing the risk of stroke with pradaxa. the price was so great that we couldn't turn it down. it saved us so much money i was kind of looking around like... this is too good to be true. it was that good. saving you time and money is what we're all about. so when you're ready to buy a car, visit truecar. ♪ ♪ liz: okay. charlie gasparino would say he's the reason you need to watch fox business, but here's another reason: this video that you're looking at was shot in 2012. that's me with the gigantic jet engine with many parts made by alcoa, and there's klaus kleinfeld, alcoa's chairman and ceo, in whitehall, michigan. we were there in 2012 because he wanted to show me the components made by alcoa, the great employees working on this but also where the company was going to be. not where it was that second, but where it was going to be. since then alcoa's stock has gained more than 70%. the company has pushed much more deeply into the aerospace business just as we told you it would. today the metals company took a big new step in that direction, announcing it's buying jet engine parts maker firth rixson for $2.85 billion, and the markets are welcoming that news. alcoa's stock up another 3% today. joining us now, the man who worked it, klaus kleinfeld, alcoa chairman and -- remember we were buy that jet engine? >> i totally do. and, first of all, we both have certainly become younger, that's the first thing -- [laughter] liz: how about worked on not aging. >> secondly, you see the result it is, you know? come visit some facilities and then stock takes off. liz: i remember when i put my hand on that engine and i pushed it down -- >> the magic. liz: it was so light. it was so unbelievably light, and it started spinning right behind you, and it kept spinning with just the minimal amount of pressure that i had put on it because of the aluminum within that jet engine. >> well, actually, on the jet engine there is more nickel super alloys and titanium. there on the front part, which you touched which are the fan blades -- there we have some aluminum -- but the inside because it's all around there, it's all about the temperature. liz: watch this. i barely -- i'm not strong. >> absolutely. liz: there it goes. it just starts moving. so firth rixson -- >> yes. liz: what does it do for you? it's got super alloys to make all kinds of things, correct? >> well, aerospace in the main, and the jet engines. 35% -- 75% of their revenues are in the jet engine. one of the most critical parts in the new models, in the new planes. and that's all about efficiency. and that's where firth rixson's jewel comes in. we are in the hot part. we are in the blades, and they are in the discs, right? and the rings, which is the casing part. so this is a fantastic complementary part, and we are driving the innovation, and leaders are coming together. we are building out an innovation powerhouse in lightweighting metals, and at the same time we are working very hard to make our commodity business more competitive. liz: i had asked you how long had you eye on firth rixson, you said quite a while, but we were waiting for the right moment. some analysts are saying you paid a little much for it. >> i don't think so. i've been busy all day long talking to analysts, and the real interesting thing here is when you do the calculation, you can't look at today's revenues because firth rixson has invested massively into future technologies. that's now coming online. it's very unique, very, very innovative technology, and they are just starting the production now. it will come as revenues in the next year. we know that the revenues there will be 1.6 billion in 2016 and 350 million -- [inaudible] so that's more what you have to look at when you do the calculation. liz: from aerospace to auto bodies, we know that the ford f150 that's shipping has the human thumb body. i saw some interesting statistics that spin forward the utilization of aluminum in auto bodies and, in essence, it looks like it will move fifefold -- fivefold, the sheet metal world will expand at least by fivefold by the year 2020. >> yes. liz: you're the leader here. >> we are. and it's not just that we have been working on this, i mean, and helped audi, the first all-aluminum car, to be produced in the mid '80s. and then it was in the '90 when they started to launch the a8. and from then on to today about 700,000a8s have been sold. if you look at the volume of the f150, about 700,000 have been sold last year. so you actually have to see that this was a step change. that's what's driving the statistics -- liz: let's get to aluminum prices, they're up about 5.6% year to date, but really, in essence, they're not moving that much over the past several years, yet your stock price has. you've been able to grow this company even though the price of aluminum hasn't jumped exponentially. so here's my question, will aluminum demand exceed production year and in 2015? i ask that because that must mean people are using more of it, it gives us a sense of what's going to happen with that stock. >> yeah. well, first of all, we have built our value-add business, and that's a very strong driver of the value of the stock. today, i mean, the value-add business makes up about 57% of the total revenues and almost 80% of the profits. right? so that's one thing. the second thing we have been working very, very hard to come down on the cost position for our upstream businesses, for the commodity business. we've created a very competitive upstream business. i can't influence the price of commodities, but i can influence the cost -- liz: so will demand exceed production? >> we have already seen that today particularly in the west. china is insulated, you know, they have a very high cost position, won't export but also won't import at this point in time -- liz: interestingly, aluminum's not on the metals board here, but as we talk about it, the price itself, what do you expect for this year? >> well, we actually see that the physical demand drives the regional premiums. regional premiums are at an absolutely record high, and that's a very good indication that supply is lower than demand. fantastic. liz: well, we're watching it. year to date you're up 40%, year-over-year, 92%. very nice to see considering how hard you've worked. klaus kleinfeld, ceo of alcoa. >>> the closing bell in about 18 minutes. new york attorney general eric schneiderman accusing barclays of engaging in this pattern of fraud and deceit, his words, when it comes to high frequency trading, its dark pools and how the bank kept their clients in the dark about it. the new york ag joining us live in studio along with our very own charlie gasparino who's been breaking news, major headlines on that story. that's next. >>> and we're always on call for you, go to foxbusiness.com/oncall. sign up for layman on call -- claman on i call, and weevil deliver the big -- we'll deliver the biggest interviews directly to your smartphone. ♪ ♪ ♪ [ female announcer ] we love our smartphones. and now telcos using hp big data solutions are feeling the love, too. by offering things like on-the-spot data upgrades -- an idea that reduced overcharge complaints by 98%. no matter how fast your business needs to adapt, if hp big data solutions can keep wireless customers smiling, imagine what they can do for yours. make it matter. imagine what they can do for yours. when folks think about wthey think salmon and energy. but the energy bp produces up here creates something else as well: jobs all over america. engineering and innovation jobs. advanced safety systems & technology. shipping and manufacturing. across the united states, bp supports more than a quarter million jobs. when we set up operation in one part of the country, people in other parts go to work. that's not a coincidence. it's one more part of our commitment to america. humans. even when we cross our "ts" and dot our "i's", we still run into problems. that's why liberty mutual insurance offers accident forgiveness with our auto policies. if you qualify, your rates won't go up due to your first accident. because making mistakes is only human, and so are we. we also offer new car replacement, so if you total your new car, we'll give you the money for a new one. call liberty mutual insurance at... and ask us all about our auto features, like guaranteed repairs, where if you get into an accident and use one of our certified repair shops, the repairs are guaranteed for life. so call... to talk with an insurance expert about everything that comes standard with our base auto policy. and if you switch, you could save up to $423. liberty mutual insurance -- responsibility. what's your policy? liz: we need to look at barclays sto. it is continuing to fall. in fact, it took a leg down over the past about 15 minutes. this after, first, our very own charlie gasparino broke the news yesterday that new york attorney general eric schneiderman had opened an investigation into the way barclays has marketed its so-called dark pool for traders. charlie and mr. schneiderman joining me now to discuss the investigation, what comes next, but also the breaking news from the last couple of minutes that, in essence, says barclays is announcing its own internal investigation. your investigation shows what? >> well, our investigation showed a systemic pattern of misrepresentations to barclays customers about a variety of critical issues. they were representing that their dark pool -- which is, there are many dark pools operated by different financial institutions. the promise of a dark pool is that you can conceal a trade so you won't drive the market away. if you want to buy ten million shares of facebook, as soon as you start buying in an open exchange, it publishes all the prices -- liz: everybody sees it. >> and the price goes up. the problem is you can't see what's going on in a dark pool, so you have to rely on the results, but you also have to rely on the representations of the bank. and you go to a bank that's a reputable bank, barclays was telling people that the amount of predatory trading -- and they used the terms predatory and toxic and aggressive trading, meaning trading by high frequency traders, was de minimis. in 2013 they told people it was 9%, march of this year they said, oh, it's down to 6%. in fact, we know from their own internal documents it was much higher than this. they also touted this internal profiling service that they had great materials that they sent to their customers over and over again to attract in institutional investors saying they monitored all trades, and if someone was to engage in too much predatory trading, they would kick them out of the dark pool. in fact, we know from their internal documents they never kicked one high frequency trader out of the dark pool. >> i think this is a fascinating case on a lot of levels including you're going after the dark pool which i really think is a problem in the market. but, you know, why did you go there? i mean, that's kind of interesting. everybody's talking about high frequency trading being a problem, and you actually did something that was counterintuitive, in my view, and went after what i think is the real problem. why did -- is that because you thought the dark pool was the real problem, or is that where the law is strongest in this area? >> we started looking at this area, and it really does start with high frequency trading because high frequency trading has a lot of implications. it's a challenge under the current set of laws to go after high frequency traders themselves, but we've been looking at all the institutions that do business them and that profit from high frequency trading in one way or another, exchanges and banks, dark pools were obviously a -- liz: and it leaves the little guy, the retail investor, because they cannot compete at the speed which high frequency traderses do. >> even little guys invest through fidelly and vanguard, a lot of small investor savings, and there was an aggressive effort on barclays' behalf to bring in the big institutional investors. in addition to the fact that they were misrepresenting the volume of high frequency trading in their dark pool, we found a specific presentation to a -- from very recently -- to a major institutional investor that showed 75% of that -- 88% of that investor's orders were being fill inside barclays' dark pool which means they clearly weren't sending them to the best exchange for the best price, and 75% of all their orders were filled in the dark pool. they ordered the employee preparing this to change the number to 35% from 75, that employee was fired when he refused to do that. >> you hit them with this, i'm assuming. you had settlement negotiations. >> we had discussions with them prior to this. we were subpoenaing documents. i wouldn't give them an a for their cooperation, but we realized this was an ongoing fraud when we received documents recently showing a month or two months or three months ago, actually, you guys were in this too because there was a report a few months ago, hey, all these financial journalists are criticizing what we're doing here, and the attorney general of new york -- here are talking points to rebut it, and the talking points were a bunch more misrepresentations. >> did you offer them a chance to settle this out? >> we didn't have a negotiation that got that close -- >> interesting. >> -- because we realized this was an ongoing problem. >> here's the one thing i have to bring up. barclays, i mean, if this, i guess, gets proven in court, barclays is in violation of a doj deferred prosecution agreement they reached on the libor settlement. this is big, this can shut down the bank. >> well, i'm not going to comment on what doj is doing or any other regulator. there are, obviously, other regulatory and law enforcement agencies looking at this situation and looking at this phenomenon more generally. i mean, you've got to keep in mind our office only became aware of some of these relationships with high frequency traders, we started investigationinging at -- investigating at the beginning of 2013, and we have since confronted some actors that are -- >> do you want to close these guys down though? >> we're seeking injunctive relief and monetary relief -- >> everything's on the tablesome. >> everything is on the table, but we're in court now. liz: they're not the only ones with dark pools. ,ubs and credit swiss, but u.s. banks have them too. >> credit suisse has the largest, i think barclays is number two -- liz: would you now say to yourself i better look at other banks and see what they're doing? >> well, the thought has occurred to us before now. [laughter] liz: you had a whistleblower in this case, did you not? >> we had whistleblowers -- liz: blowers, plural? [laughter] >> plural. look, there are a lot of people out there on the street who are, the overwhelming majority of people in financial services are honest people who want to make money for themselves and their clients, and there are a lot of folks who are disgusted by what they're seeing. we're going to follow the facts wherever they lead. there are other agencies involved, and i think this is the beginning of a much more intensive conversation within the banks themselves about how this business -- >> without talking about specific investigation, i understand you don't want to give that up, put on your predictive cap. will there be less dark pools a year from now, or will the 36 that exist still be there? >> i think that this is going to change the way dark pools do business. i think that the challenge for dark pools has always been maintaining their credibility. even though you can't see what's going on here, you can trust us because we're a credible institution, and we're reporting everything. once dark pools start to lose their credibility, it poses a challenge to this entire system. i do think there are some smart banks that are looking to move away from this model, and, you know, we have a lot of issues with the overall regulatory structure. i'm very pleased that mary jot this on a much broader level -- changes to market structure. >> but are you getting along with them in this whole thing? there's always been friction. >> well, understandably so -- [laughter] but i i have to say mary jo white inherited a system that had been set up by some of her predecessors that arguably enables this whole system of high frequency trading and the links between the exchanges. she's looking at it systemically, she's looking at high frequency trading as just a broader -- one aspect of a broader problem of market structure, and that's something that's very important for them to be looking at. liz: please keep us posted. as you know, charlie's been at the forefront of the story. >> fascinating case. liz: eric schneiderman and charlie gasparino. now go break more stories. >> okay. liz: closing bell ringing in five minutes. "after the bell" coming right up, stay tuned. ♪ i ys say be thman with the plan but with less ergy, moodiness, i had to do something. i saw mdoctor. a
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