A lawsuit filed in Manhattan’s US District Court by two Florida pension plans seeks to hold Barclays liable for price drops in its American certificates of deposit (ADR) as costs piled up because of the blunder.
The complaint says Barclays gave “materially false and misleading” assurances in its annual reports that its internal controls over financial reporting were effective.
She also said the bank overstated earnings and understated operating and “litigation and conduct” costs, failing to disclose the overstatement in its 2021 earnings releases.
“The lack of controls in place to account for the number of titles issued against the number of titles registered is a basic failure of internal control that is so obvious that it amounts to willful recklessness,” the complaint states.
Barclays declined to comment. Chief executive CS Venkatakrishnan and his predecessor Jes Staley are among the other defendants.
The bank revealed in March that it had sold $15.2 billion more in structured and exchange-traded notes than the $20.8 billion allowed by US regulators. In July, the bank increased the oversold amount by $2.4 billion.
Barclays offered to repurchase the excess securities and on July 28 said it had set aside approximately 1.59 billion pounds (now $1.73 billion) related to the excess issue.
The bank said on September 15 that investors had submitted claims covering $7 billion in securities.
The lawsuit filed Friday by the City of North Miami Beach Police and Fire Officers Retirement Plan and the City of North Miami Beach General Employees Retirement Plan seeks damages for ADR holders from Barclays from February 18, 2021 to March 25, 2022.
The case is City of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan et al v. Barclays Plc et al, US District Court, Southern District of New York, No. 22-08172.
($1 = 0.921 pounds)