Barclays shareholders sue in U.S. over $17.6 billion debt sale blunder

By Jonathan Stempel

NEW YORK (Reuters) – Barclays Plc was sued on Friday in a proposed U.S. class motion wherein shareholders claimed they have been defrauded in reference to the British financial institution’s sale of $17.6 billion extra debt than regulators had allowed.

A grievance filed within the U.S. District Court docket in Manhattan by two Florida pension plans seeks to carry Barclays accountable for declines within the costs of its American depositary receipts (ADR)as prices mounted over the blunder.

The grievance stated Barclays made “materially false and deceptive” assurances in its annual experiences that its inner controls over monetary reporting have been efficient.

It additionally stated the financial institution overstated revenue, and understated working and “litigation and conduct” bills, by failing to reveal the overissuance in its 2021 earnings releases.

“The failure to have controls in place to account for the variety of securities issued towards the variety of securities registered is such an elementary failure of inner management that’s so apparent as to be intentionally reckless,” the grievance stated.

Barclays declined to remark. Chief Government C.S. Venkatakrishnan and his predecessor Jes Staley are among the many different defendants.

The financial institution revealed in March that it had offered $15.2 billion extra structured and exchange-traded notes than the $20.8 billion U.S. regulators had licensed. In July, the financial institution elevated the oversold quantity by $2.4 billion.

Barclays supplied to purchase again the surplus securities, and on July 28 stated it put aside about 1.59 billion kilos (now $1.73 billion) associated to the overissuance.

The financial institution stated on Sept. 15 that buyers had submitted claims protecting $7 billion of the securities.

Friday’s lawsuit by the Metropolis of North Miami Seaside Police Officers’ and Firefighters’ Retirement Plan and Metropolis of North Miami Seaside Normal Workers’ Retirement Plan seeks damages for Barclays ADR holders from Feb. 18, 2021 to March 25, 2022.

The case is Metropolis of North Miami Seaside Police Officers’ and Firefighters’ Retirement Plan et al v. Barclays Plc et al, U.S. District Court docket, Southern District of New York, No. 22-08172.

($1 = 0.921 kilos)

(Reporting by Jonathan Stempel in New York; Modifying by Chris Reese)

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