American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Barclays settles $17.7 billion debt sale lawsuit for $19.5 million amid securities fraud claims

by admin December 4, 2024
December 4, 2024
Barclays settles $17.7 billion debt sale lawsuit for $19.5 million amid securities fraud claims

Barclays has agreed to pay $19.5 million to settle a securities fraud lawsuit filed by shareholders in Manhattan federal court, over its misstep in selling $17.7 billion more debt than US regulators had authorized.

The settlement, which was filed in court on Tuesday, is subject to approval by US District Judge Katherine Polk Failla.

What was the Barclays debt sale case?

The case stems from a significant error by Barclays that resulted in the overselling of structured and exchange-traded notes, and allegations that the bank’s internal controls were inadequate to prevent the mistake.

The lawsuit was filed by investors who claimed they suffered financial losses because they trusted Barclays’ assurances that its procedures were in line with regulatory standards.

The plaintiffs argued that the bank misrepresented its internal control mechanisms, leading them to invest in Barclays American depositary receipts between February 2021 and February 2023, unaware of the risks posed by the overissuance of debt.

In March 2022, Barclays admitted that it had sold $15.2 billion more debt than permitted by US regulators between 2017 and 2022.

The situation worsened when, in July 2022, the bank revised the oversold amount to $17.7 billion and set aside £1.59 billion ($2.01 billion) to address the excess issuance.

The bank also repurchased the oversold debt and restated its financial statements for 2021, with executives calling the error an “entirely avoidable” and “self-inflicted” issue.

‘Recklessly’ negligent

Despite the settlement, Barclays has maintained that it did not engage in any wrongdoing.

The bank’s decision to settle, however, comes after a court ruling that allowed the case to move forward, rejecting the bank’s attempt to dismiss the lawsuit.

US District Judge Failla found that shareholders had a plausible case, and suggested that Barclays executives, including former CEO Jes Staley, could be seen as “recklessly” negligent in handling the matter.

She also pointed to the failure of the bank’s debt tracking system, which did not exist, as a key failure in preventing the overissuance.

The lawsuit, titled In re Barclays Plc Securities Litigation, accused the bank of misleading investors about its internal controls and regulatory compliance, resulting in significant financial losses.

Shareholders argued that Barclays’ assurances regarding its debt policies and procedures were generic and insufficient to protect their investments.

As part of the settlement agreement, Barclays did not admit to any wrongdoing but agreed to compensate shareholders for their losses.

The case serves as a reminder of the importance of strict adherence to regulatory standards and robust internal controls in large financial institutions.

Barclays’ former CEO Jes Staley stepped down from his position in November 2021 following the fallout from the overissuance.

Although the settlement resolves the immediate legal challenges for Barclays, the broader implications for the bank’s internal controls and regulatory compliance practices remain to be seen.

This case highlights ongoing concerns in the financial sector regarding transparency, risk management, and the responsibilities of banks to safeguard investor interests.

The $19.5 million settlement comes after months of litigation and will likely serve as a cautionary tale for other financial institutions on the importance of meeting regulatory requirements and maintaining effective oversight of financial transactions.

The post Barclays settles $17.7 billion debt sale lawsuit for $19.5 million amid securities fraud claims appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Oil struggles to break out; prices expected to trade in a narrow range ahead of OPEC meeting
next post
Bank of Korea pledges short-term liquidity boost to stabilize FX market amid political turmoil in South Korea

Related Posts

Josh Brown questions Nike’s ability to turn around,...

May 30, 2025

Home prices soar even higher in February, despite...

May 5, 2024

Williams-Sonoma stock analysis: sky is the limit for...

November 21, 2024

FTSE 100 index shares to watch: Shell, BP,...

October 25, 2024

Asian markets open: Vietnam index at 3-year high...

July 3, 2025

Li Auto stock: Tesla and Nio rival could...

September 25, 2024

Chocolate prices in the UK surge to a...

June 18, 2025

Charter, Cox to merge in mega deal to...

May 17, 2025

Trump Media shares up by 40% on Robinhood...

November 6, 2024

Construction, cans, and cars: industries on edge as...

March 13, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Kraft Heinz plans breakup, weighs $20 billion grocery spin-off: report

      July 13, 2025
    • Trump’s 50% tariff on Brazil imports to brew trouble for Starbucks and Dutch Bros

      July 13, 2025
    • US to announce 30% tariff on EU and Mexico says Trump

      July 13, 2025
    • Why India is rushing to build bigger banks and what’s standing in the way

      July 13, 2025
    • Wall Street braces for weakest earnings season since 2023 amid market highs

      July 13, 2025

    Categories

    • Business (3,388)
    • Investing (2,615)
    • Latest News (2,017)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved