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

A branch of Barclays Bank sometimes appears, in London, Britain, February 23, 2022. REUTERS/Peter Nicholls

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NY, Sept 23 (Reuters) – Barclays Plc (BARC.L) was sued on Friday in a proposed U.S. class action where shareholders claimed these were defrauded regarding the the British bank’s sale of $17.6 billion more debt than regulators had allowed.

A complaint filed in the U.S. District Court in Manhattan by two Florida pension plans seeks to carry Barclays in charge of declines in the costs of its American depositary receipts (ADR)as costs mounted on the blunder.

The complaint said Barclays made “materially false and misleading” assurances in its annual reports that its internal controls over financial reporting were effective.

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In addition, it said the lender overstated profit, and understated operating and “litigation and conduct” expenses, by failing woefully to disclose the overissuance in its 2021 earnings releases.

“The failure to possess controls set up to take into account the amount of securities issued contrary to the amount of securities registered is this elementary failure of internal control that’s so obvious concerning be deliberately reckless,” the complaint said.

Barclays declined to comment. LEADER C.S. Venkatakrishnan and his predecessor Jes Staley are on the list of other defendants.

The lender revealed in March that it had sold $15.2 billion more structured and exchange-traded notes compared to the $20.8 billion U.S. regulators had authorized. In July, the lender increased the oversold amount by $2.4 billion. read more

Barclays wanted to buy back the surplus securities, and on July 28 said it reserve about 1.59 billion pounds (now $1.73 billion) linked to the overissuance. read more

The lender said on Sept. 15 that investors had submitted claims covering $7 billion of the securities. read more

Friday’s lawsuit by the town of North Miami Beach Police Officers’ and Firefighters’ Retirement Plan and City of North Miami Beach General Employees’ Retirement Plan seeks damages for Barclays ADR holders from Feb. 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, U.S. District Court, Southern District of NY, No. 22-08172.

($1 = 0.921 pounds)

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Reporting by Jonathan Stempel in New YorkEditing by Chris Reese

Our Standards: The Thomson Reuters Trust Principles.

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