The U.S. Department of Justice on Thursday sued Barclays Plc (>> Barclays PLC) and two former executives on civil charges of fraud in the sale of mortgage-backed securities during the run-up to the 2008-09 financial crisis.
The lawsuit was filed after Barclays resisted a penalty the U.S. government had sought in settlement negotiations, a person familiar with the matter said. The person would not disclose the government’s demand.
Major U.S. banks, including JPMorgan Chase & Co (>> JPMorgan Chase & Co.) and Bank of America Corp (>> Bank of America Corp), have paid tens of millions of dollars to settle similar claims over misconduct in the sale and pooling of mortgage securities, which helped to cause the financial crisis.
Barclays was among a handful of European banks still under investigation by the Justice Department, according to company disclosures. Deutsche Bank (>> Deutsche Bank AG) and Credit Suisse (>> Credit Suisse Group AG) are also in settlement talks, sources have said.
Barclays is accused of deceiving investors about the quality of loans underlying tens of billions of dollars of mortgage-backed securities between 2005 and 2007, according to the lawsuit filed in U.S. District Court in Brooklyn.
Three former Barclays (>> Barclays PLC) traders jailed for manipulating Libor benchmark interest rates after a London trial have been denied a request to appeal against their conviction and sentence, the wife of one said on Friday.
Julie Pabon said her husband, Alex, and former colleagues Jay Merchant and Jonathan Mathew were recently notified that their requests had been rejected by the Court of Appeal.
The men’s lawyers and the UK Serious Fraud Office (SFO), the prosecutor in the case, did not respond to requests for comment.
Pabon, an American, was sentenced to two years and nine months in jail in July. Merchant, his former New York-based superior, was sentenced to six-and-a-half years, and Mathew, a London-based junior rate submitter, was handed four years.
“I am shocked and saddened yet somewhat relieved that our fight appears to be nearing the end,” Julie Pabon wrote in an email received by Reuters.
Julie Pabon, an American who lives in the United States and had appealed directly to the head of the SFO, David Green, on behalf of her husband, said Alex had sent her a text message on June 30 after his London trial saying: “I’m sorry … guilty…”
Law360, New York (October 26, 2016, 2:55 PM EDT) — Bondholders suing major banks for allegedly conspiring to manipulate the London Interbank Offered Rate told a Manhattan federal judge on Wednesday that they have settled with UBS AG and Barclays Bank PLC.
UBS has reached a settlement with bondholders over Libor-rigging claims. (Credit: AP) The bondholders, whose claims against the banks were resurrected by the Second Circuit in May, told U.S. District Judge Naomi Reice Buchwald that they have reached a settlement with UBS and are finalizing one with Barclays over claims that the banks engaged…
Law360, New York (August 29, 2016, 3:00 PM ET) — Barclays PLC’s former global head of its foreign exchange spot business should be fined $1.2 million and banned from the banking industry after using chat rooms with competitors to manipulate the market, the Federal Reserve Board said Monday.
Christopher Ashton’s “personal dishonesty” and disregard for his employer constitute unsafe and unsound banking practices and a breach of fiduciary duty under the Federal Deposit Insurance Act, the board said in its notice. The London-based trader was fired in May 2015 for misconduct while the bank pled guilty to criminal…
Barclays (>> Barclays PLC) has reached a $100 million (£76.70 million) multi-state settlement over charges that it manipulated the Libor and Euribor interest rate benchmarks, New York Attorney General Eric Schneiderman said on Monday.
The settlement with 44 states marks the latest in a series of enforcement actions the bank has faced in connection with Libor manipulation.
Barclays is the first of several banks under investigation by state attorneys general to reach a settlement, Schneiderman said in a statement, adding that the bank cooperated with the multi-state probe.
He said government entities and non-profits were “defrauded of millions” when they entered into swap contracts with Barclays as a result of the rate-rigging.
In 2012, Barclays reached a $453 million agreement with the U.S. Justice Department, the Commodity Futures Trading Commission and British authorities to settle parallel charges.
As part of its agreement with the Justice Department, Barclays admitted to wrongdoing that occurred between August 2005 and May 2008, when some of its traders called their counterparts at competing institutions and colluded to submit Libor rates that benefited their trading positions.
“Barclays is pleased to have resolved the state attorneys’ general investigation into Barclays’ legacy LIBOR- and Euribor-related activities,” a Barclays spokesman said.
“We believe this settlement is in the best interests of our shareholders and clients, and allows us to continue to focus on the future and serve our clients.”
Barclays Bank and a defunct subprime lending unit of the company are off the hook for allegedly misrepresenting the quality of the mortgages that made up a $619 million mortgage bond after the Supreme Court of the state of New York ruled that U.S. Bankand the Federal Housing Finance Agency waited too long to file a lawsuit against Barclays.
Law360 first reported the news of the dismissal.
According to court documents, Judge Marcy Friedman ruled recently that U.S. Bank, acting as the trustee for Structured Asset Securities Corporation Mortgage Loan Trust, and the FHFA, acting as the conservator for Freddie Mac, filed suit against Barclays and the now-shuttered EquiFirst beyond the statute of limitations, and is therefore dismissing the lawsuit.
A federal judge on Wednesday said a former star Lehman Brothers Holdings Inc trader was not entitled to an $83 million (£64.4 million) bonus he claimed he was owed following the investment bank’s 2008 collapse, on top of a similar sum that Barclays Plc already paid him.
U.S. District Judge Lorna Schofield in Manhattan also said the former trader Jonathan Hoffman did not deserve $7.7 million that a federal bankruptcy judge had said he could recoup from the estate of Lehman’s brokerage unit, Lehman Brothers Inc, based on an unpaid instalment from his 2007 bonus.
Hoffman’s quest for additional pay is one of the largest lawsuits left in the wind-down of Lehman, whose Sept. 15, 2008 bankruptcy remains the biggest in U.S. history and helped trigger a global financial crisis.