(Adds background of law firm, ex-SEC chief litigator hired in Barclays dark pool probe)
By Steve Slater and Sarah N. Lynch
LONDON/WASHINGTON June 27 (Reuters) - Barclays Plc has hired lawyers from the high-profile firm Wilmer Cutler Pickering Hale and Dorr LLP to help the bank defend itself against accusations that it deceived investors in its "dark pool" trading venue, according to people familiar with the matter.
Matthew Martens, formerly the chief litigator at the U.S. Securities and Exchange Commission, is among the WilmerHale lawyers working on the case, the sources said.
Martens is known for leading the SEC to victory in its civil fraud trial against Fabrice "Fabulous Fab" Tourre, the former Goldman Sachs vice president who was found liable by a New York jury for misleading investors in a subprime mortgage product that failed during the financial crisis.
Kerrie Cohen, a spokeswoman for the bank, declined to comment.
Martens did not respond to an e-mail seeking comment.
Barclays' shares slid 6.5 percent on Thursday to a 19-month low after New York Attorney General Eric Schneiderman filed a securities fraud lawsuit that takes aim at the British bank's "dark pool" trading venue, known as LX Liquidity Cross.
Dark pools let institutional investors trade large blocks of shares anonymously and only make trading data available afterwards so that investors with large orders are not at a disadvantage.
The news wiped more than 2 billion pounds ($3.4 billion) off of Barclays' market value on Thursday, though the stock closed up 0.5 percent on Friday on the London Stock Exchange. Barclays' New York-listed shares tumbled 7.4 percent on Thursday to close at a 19-month low of $14.55 following news of the lawsuit and then recovered on Friday, ending up 2.1 percent.
The attorney general's lawsuit accuses the Barclays dark pool of giving high-frequency traders an unfair advantage, even though the bank had promised investors they would be protected from "predatory" and "toxic" traders.
The complaint also said the bank broke its promise to get its customers the best prices by executing nearly all of their orders on LX, instead of searching for better deals at rival exchanges and trading platforms.
Barclays' dark pool business originally belonged to Lehman Brothers, the investment bank that collapsed in September 2008. Barclays subsequently bought Lehman's U.S. business.
The 31-page complaint from Schneiderman said internal Barclays documents valued the growth opportunity from pushing more orders into its dark pool at between $37 million and $50 million per year.