Barclays beats two lawsuits in US over $17.7 billion issuance blunder
Barclays won the dismissal on Friday of two U.S. securities fraud lawsuits stemming from the British bank’s unauthorized sale of $17.7 billion more securities than U.S. regulators allowed.
U.S. District Judge Lewis Liman in Manhattan said investors who acquired Barclays’ iPath Series B S&P 500 VIX Short-Term Future exchange-traded notes (“VXX”) could not sue over general assurances the bank made about its internal controls even as it issued the notes without the required regulatory approval.
Liman also dismissed similar claims by investors who got caught in a market squeeze when Barclays suspended VXX sales in March 2022, causing the price of VXX securities they had sold short to soar 140% above their so-called indicative value.
The judge also found no proof of intent to defraud or conscious recklessness, saying bank officials including former Chief Executive Jes Staley would have been incentivized to register more securities rather than let the problem grow.
In September 2022, Barclays reached a $361 million settlement, including a $200 million civil fine, with the U.S. Securities and Exchange Commission related to the over issuance. Barclays agreed in December to pay $19.5 million to settle a related shareholder lawsuit in the Manhattan court.
Source: Finance.Yahoo
