Barclays Plc (BARC.L) was sued on Friday in a proposed U.S. class action. Shareholders said they were cheated when the British bank sold $17.6 billion more debt than regulators had allowed.
Barclays Plc (BARC.L) was sued on Friday in a proposed U.S. class action. Shareholders said they were cheated because the British bank sold $17.6 billion more debt than regulators had allowed.
Two Florida pension plans have filed a lawsuit in the U.S. District Court in Manhattan. They want Barclays to pay for the price drops of its American depositary receipts (ADR) as the cost of the mistake has grown.
In its annual reports, Barclays said that its internal controls over financial reporting were working, but the complaint said that this was “materially false and misleading.”
It also said that the bank overstated its profit and underestimated its operating and “litigation and conduct” costs by not mentioning the overissuance in its 2021 earnings reports.
“The failure to have internal controls in place to keep track of the number of securities issued versus the number of securities registered is such a basic oversight that it is so obvious that it was done on purpose,” the complaint said.
Barclays didn’t want to say anything. Chief Executive C.S. Venkatakrishnan and Jes Staley, who was CEO before him, are also being charged.
In March, the bank said it had sold more structured and exchange-traded notes than the $20.8 billion that U.S. regulators had allowed. In July, the bank added $2.4 billion to the amount of money it had oversold.
Barclays offered to buy back the extra securities and said on July 28 that it had set aside 1.59 billion pounds ($1.73 billion) because of the overissuance.
On September 15, the bank said that investors had put in claims for $7 billion worth of the securities.
The City of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan and the City of North Miami Beach General Employees’ Retirement Plan filed a lawsuit on Friday to get damages for Barclays ADR holders from February 18, 2021, to March 25, 2022.
Police Officers’ and Firefighters’ Retirement Plan of the City of North Miami Beach et al. v. Barclays Plc et al.