The bank’s shares tumbled over 5.2% in early trading in London, wiping over $3 billion off its market value as it sunk to a 20-month low of 218 pence. The bank’s shares have come under pressure from a number of directions in recent months, but concerns over the operation of the LX dark pool,  one of the U.S.’s largest, hadn’t been among them.

The suit, announced Wednesday afternoon, alleges that Barclays deceived and defrauded investors by making false statements about how it runs LX, which like other dark pools allows certain bidders and sellers to engage in private stock trades that are not published for public view.

The suit alleges that Barclays misled its client trades by preferring to route their trades through its own dark pool venue while telling the clients it would send the trades through whichever exchange could best execute the trade. Schneiderman is also accusing the British bank of falsely telling its clients they would be protected from high-frequency traders if they traded through the Barclays dark pool when, in fact, the bank never barred any traders from participation and even favored high-frequency traders.

“The facts alleged in our complaint show that Barclays demonstrated a disturbing disregard for its investors in a systematic pattern of fraud and deceit,” Schneiderman said in a statement. “Barclays grew its dark pool by telling investors they were diving into safe waters. According to the lawsuit, Barclays’ dark pool was full of predators – there at Barclays’ invitation.”

Schneiderman added an allegation that Barclays went so far as to alter the marketing materials it sends its clients to remove the name of a high-frequency trading firm that was one of the largest participants in the Barclays dark pool.

“We take these allegations very seriously,” said a Barclays spokesman. “Barclays has been cooperating with the New York Attorney General and the SEC and has been examining this matter internally. The integrity of the markets is a top priority of Barclays.”

The Barclays dark pool is among the largest in the U.S. based on trading volume, alongside Credit Suisse and UBS, according to trading statistics made public earlier this month by the Financial Industry Regulatory Authority (FINRA).

Schneiderman said earlier this year that his office was investigating the technology and practices of high frequency traders, including alternative trading platforms such as dark pools. The state’s top attorney has been looking into whether such practices give some traders unfair advantages over the rest of the market, calling them a “new breed of predatory behavior.” Over the past few months, Schneiderman has been meeting with various exchanges and alternative trading venues to talk about reforms on Wall Street.

He’s not alone. The U.S. Securities and Exchange Commission has also targeted dark pools and high-speed trading, with SEC Chairman Mary Jo White saying earlier this month that high-frequency traders should have to register as broker dealers so they can be subjected to regulatory scrutiny.

Update: This article has been updated with a statement from Barclays.