BARCLAYS said yesterday it would challenge a fraud lawsuit in which New York’s attorney general alleged the banking giant misled large institutional investors.

The London-based bank, which devalued by £3 billion in one stock market session after the claims were disclosed last month, said it had a duty to its shareholders, clients and staff to defend its position.

The lawsuit alleged Barclays deceived investors about its dark pool — an electronic operation where trades take place out of public view.

New York attorney general Eric Schneiderman said the bank promoted a service it claimed was a ‘‘surveillance’’ system that would identify and hold accountable “toxic”, “predatory” and “aggressive” traders but instead the service “was essentially a sham.”

In its response to the allegations, Barclays said the complaint failed to identify any fraud, material mis-statements or victims and overlooked the fact that its clients were sophisticated traders who invest billions of dollars of assets.