Dark pools are not necessarily illegal or against SEC regulations, if that’s what you mean. There are regulations in place, but the loopholes and loose definitions provide a legal cover for those trading in the dark pools.
Now, there probably are some trades that are illegal (or at least immoral), but a dark pool is not necessarily illegal. They are just concealed from the public. It is that concealment that leads many to say they should all be made illegal so that the public is aware of all trades.
When the mega-banks and firms are caught investing their client’s funds (like Corzine’s), that is not a dark pool but an illegal investment and should absolutely be prosecuted.
That said, the SEC is worthless when it comes to prosecuting the mega-banks for flagrantly illegal activity.
Are you saying that dark pools lie within SEC regs? If so, very interesting.