Business

Barclays reaches $19.5 million settlement over debt sale blunder

12/04/2024

NEW YORK, Dec 3 (Reuters) – Barclays (BARC.L), opens new tab agreed to pay $19.5 million to settle a lawsuit in Manhattan by shareholders who accused the British financial institution of securities fraud after it offered $17.7 billion extra debt than regulators allowed.

A preliminary settlement of the proposed class motion was filed on Tuesday in Manhattan federal courtroom, and requires approval by U.S. District Judge Katherine Polk Failla.

Shareholders claimed they misplaced cash by counting on Barclays’ assurances that its insurance policies and procedures met regulatory requirements, and that the financial institution was dedicated to robust inner controls.

Barclays admitted in March 2022 that it had offered $15.2 billion extra structured and exchange-traded notes within the prior 5 years than the $20.8 billion licensed by U.S. regulators.

Four months later, the financial institution elevated the oversold quantity to $17.7 billion, supplied to repurchase the surplus, and put aside 1.59 billion kilos ($2.01 billion) for the overissuance.

Barclays additionally restated its 2021 monetary statements, with its executives characterizing the overissuance as an “completely avoidable” and “self-inflicted” drawback.

Barclays continued to disclaim wrongdoing in reference to the settlement, in response to the courtroom doc filed on Tuesday.

Shares within the London-listed lender, which have surged 72% to date this 12 months, had been buying and selling 0.3% down at 0815 GMT on Wednesday according to the FTSE 100 (.FTSE), opens new tab.

In February, Failla refused to dismiss the lawsuit, saying shareholders may attempt to show that Barclays officers together with former CEO Jes Staley had been “actionably reckless.”

She additionally stated that whereas Barclays’ assurances sounded generic, they might help the shareholders’ claims as a result of the financial institution’s system for monitoring debt gross sales “didn’t simply underperform – it didn’t exist.”

The lawsuit lined traders in Barclays’ American depositary receipts from Feb. 18, 2021 to Feb. 14, 2023.

Staley stepped down as Barclays’ chief government in November 2021.

The case is In re Barclays Plc Securities Litigation, U.S. District Court, Southern District of New York, No. 22-08172.

($1 = 0.7896 kilos)

Reporting by Jonathan Stempel in New York; Additional reporting by Shubham Kalia in Bengaluru and Sinead Cruise in London; Editing by Rosalba O’Brien, Jacqueline Wong and Louise Heavens

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