Barclays Agrees to Pay $19.5 Million to Settle Securities Fraud Lawsuit
Barclays, a British bank, has agreed to pay $19.5 million to settle a lawsuit brought by shareholders who accused the bank of securities fraud. The lawsuit claimed that Barclays sold $17.7 billion more debt than regulators allowed, resulting in losses for investors.
The lawsuit was filed in Manhattan federal court and requires the approval of U.S. District Judge Katherine Polk Failla. The plaintiffs claimed that they lost money because they relied on Barclays’ assurances that its policies and procedures met regulatory standards and that the bank was committed to strong internal controls.
In March 2022, Barclays admitted that it had sold $15.2 billion more structured and exchange-traded notes in the prior five years than the $20.8 billion authorized by U.S. regulators. The bank later increased the oversold amount to $17.7 billion and offered to repurchase the excess, as well as set aside 1.59 billion pounds ($2.01 billion) for the overissuance.
Barclays also restated its 2021 financial statements, with its executives characterizing the overissuance as an “entirely avoidable” and “self-inflicted” problem. The bank continued to deny wrongdoing in connection with the settlement.
The shares of the London-listed lender, which have surged 72% so far this year, were trading 0.3% down at 0815 GMT on Wednesday.
The lawsuit covered investors in Barclays’ American depositary receipts from February 18, 2021 to February 14, 2023. Jes Staley, former CEO of Barclays, stepped down from his position in November 2021.
