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Barclays to Pay $19.5M Penalty for $17.7B Excess Debt Sale
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Barclays PLC (BCS - Free Report) has agreed to pay $19.5 million as settlement charges in a lawsuit filed by shareholders in Manhattan. The company was accused of securities fraud as it sold $17.7 billion debt above the regulatory limit. This was reported by Reuters.
Details of the Lawsuit Faced by Barclays
Shareholders asserted that they faced monetary loss by relying on BCS’ assurances concerning its policies and procedures. The bank claimed it adhered to regulatory standards and remained committed to strong internal controls.
In March 2022, Barclays acknowledged that it sold $15.2 billion more structured and exchange-traded notes in the past five years than the $20.8 billion limit approved by U.S. regulators.
Four months later, the oversold amount jumped to $17.7 billion and Barclays offered to repurchase the excess amount while keeping aside £1.59 billion ($2.01 billion) for the overissuance.
Further, Barclays revised its 2021 financial statements, with its executives describing the overissuance as a “self-inflicted” issue that was “entirely avoidable.”
This February, U.S. District Judge in Manhattan, Katherine Polk Failla, denied dismissal of the lawsuit, stating that shareholders could try to prove that Barclays officials, including former CEO Jes Staley, were "actionably reckless."
The lawsuit addressed investors in Barclays' American depositary receipts from Feb. 18, 2021 to Feb. 14, 2023.
BCS Zacks Rank & Price Performance
Over the past six months, shares of Barclays have gained 22.1% against the industry’s decline of 7.7%.
This September, The Toronto-Dominion Bank’s (TD - Free Report) U.S. broker-dealer unit, TD Securities USA, agreed to pay more than $20 million in a settlement with U.S. authorities over allegations of manipulations of the U.S. Treasuries market.
TD will pay a $12.5 million criminal penalty to settle civil investigations by the SEC and the Financial Industry Regulatory Authority.
Additionally, a criminal fine of roughly $9.5 million has been levied on TD as per the agreement. Further, the bank has committed to pay $4.7 million to compensate victims and $1.4 million in forfeiture.
Similarly, Wells Fargo & Company (WFC - Free Report) has been accused of underpaying interest to clients participating in its cash sweep program.
The plaintiff, Darren Cobb, alleged that WFC breached its fiduciary duty, violated principles of fair dealing and committed breach of contract and unjust enrichment. The lawsuit alleged that WFC didn't pay enough interest on uninvested cash while making a significant profit from these funds, leading to substantial financial loss for its clients.
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Barclays to Pay $19.5M Penalty for $17.7B Excess Debt Sale
Barclays PLC (BCS - Free Report) has agreed to pay $19.5 million as settlement charges in a lawsuit filed by shareholders in Manhattan. The company was accused of securities fraud as it sold $17.7 billion debt above the regulatory limit. This was reported by Reuters.
Details of the Lawsuit Faced by Barclays
Shareholders asserted that they faced monetary loss by relying on BCS’ assurances concerning its policies and procedures. The bank claimed it adhered to regulatory standards and remained committed to strong internal controls.
In March 2022, Barclays acknowledged that it sold $15.2 billion more structured and exchange-traded notes in the past five years than the $20.8 billion limit approved by U.S. regulators.
Four months later, the oversold amount jumped to $17.7 billion and Barclays offered to repurchase the excess amount while keeping aside £1.59 billion ($2.01 billion) for the overissuance.
Further, Barclays revised its 2021 financial statements, with its executives describing the overissuance as a “self-inflicted” issue that was “entirely avoidable.”
This February, U.S. District Judge in Manhattan, Katherine Polk Failla, denied dismissal of the lawsuit, stating that shareholders could try to prove that Barclays officials, including former CEO Jes Staley, were "actionably reckless."
The lawsuit addressed investors in Barclays' American depositary receipts from Feb. 18, 2021 to Feb. 14, 2023.
BCS Zacks Rank & Price Performance
Over the past six months, shares of Barclays have gained 22.1% against the industry’s decline of 7.7%.
Image Source: Zacks Investment Research
Currently, BCS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Litigations Faced by Other Finance Firms
This September, The Toronto-Dominion Bank’s (TD - Free Report) U.S. broker-dealer unit, TD Securities USA, agreed to pay more than $20 million in a settlement with U.S. authorities over allegations of manipulations of the U.S. Treasuries market.
TD will pay a $12.5 million criminal penalty to settle civil investigations by the SEC and the Financial Industry Regulatory Authority.
Additionally, a criminal fine of roughly $9.5 million has been levied on TD as per the agreement. Further, the bank has committed to pay $4.7 million to compensate victims and $1.4 million in forfeiture.
Similarly, Wells Fargo & Company (WFC - Free Report) has been accused of underpaying interest to clients participating in its cash sweep program.
The plaintiff, Darren Cobb, alleged that WFC breached its fiduciary duty, violated principles of fair dealing and committed breach of contract and unjust enrichment. The lawsuit alleged that WFC didn't pay enough interest on uninvested cash while making a significant profit from these funds, leading to substantial financial loss for its clients.