Barclays PLC has agreed to pay $19.5 million to settle a securities fraud lawsuit filed by shareholders in Manhattan federal court, Reuters reports.
The shareholders accused the British banking giant of overselling $17.7 billion in debt beyond the limit authorized by U.S. regulators. The preliminary settlement, filed on Tuesday, is subject to approval by U.S. District Judge Katherine Polk Failla.
The lawsuit stems from Barclays’ admission in March 2022 that it had sold $15.2 billion more in structured and exchange-traded notes than the $20.8 billion authorized by regulators over the prior five years. By July 2022, the bank increased the oversold figure to $17.7 billion, offered to repurchase the excess, and set aside £1.59 billion ($2.01 billion) to address the issue. Barclays also restated its 2021 financial statements, acknowledging the error as “entirely avoidable” and “self-inflicted.”
Shareholders argued that they suffered losses due to Barclays’ assurances that its internal controls met regulatory standards. Judge Failla previously ruled in February that the case could proceed, noting that shareholders had grounds to allege “recklessness” on the part of Barclays’ executives, including former CEO Jes Staley, who stepped down in November 2021.
Despite the settlement, Barclays denies any wrongdoing. The settlement covers investors in Barclays’ American depositary receipts between February 18, 2021, and February 14, 2023. The bank’s shares, which have risen 72% this year, were down 0.3% in trading on Wednesday, aligning with the FTSE 100 index.
The case is titled In re Barclays Plc Securities Litigation, U.S. District Court, Southern District of New York, No. 22-08172.
