Barclays Plc (NYSE:BCS) (LON:BARC) was sued in a proposed U.S. class action On Friday in which shareholders alleged they were duped by the British bank’s selling of $17.6 billion more debt than authorities permitted. The stock’s trade at beginning with a price of $7.53 and throughout the trading session climbed at a high of $7.31 other than when day-trade ended the stock finally advanced 5.98% to $7.08.
A case filed in the United States District Court for the Southern District of New York by two Florida pension funds seeks to hold Barclays liable for reductions in the pricing of its American depositary receipts (ADR) as costs piled up as a result of the miscalculation.
According to the lawsuit, Barclays provided “materially false and misleading” assurances in its annual reports that its internal financial reporting procedures were effective.
It further claimed that by omitting to disclose the over issuance in its 2021 earnings announcements, the bank exaggerated profit while understating operations and “litigation and conduct” expenditures.
“The failure to have measures in place to account for the amount of securities issued in relation to the number of securities registered is such a basic lack of internal control that it is so clear as to be willfully careless,” according to the lawsuit.
Barclays did not respond. Among the other defendants are CEO C.S. Venkatakrishnan and his predecessor, Jes Staley.
In March, the bank disclosed that it had sold $15.2 billion more structured and exchange-traded notes than the $20.8 billion approved by US authorities. The bank upped the oversold amount by $2.4 billion in July.
Barclays offered to purchase back the extra securities and said on July 28 that it had put aside about 1.59 billion pounds (now $1.73 billion) to cover the over issuance.
On September 15, the bank said that investors had submitted claims totaling $7 billion in 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 complaint on Friday seeking damages for Barclays ADR holders from February 18, 2021 through March 25, 2022.
The case is City of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan et al v. Barclays Plc et al, No. 22-08172 in the United States District Court for the Southern District of New York.