Enter your email address and start getting breaking law firm and legal news right now!
|Promote Your Attorney Profile on Law.net - Get Found / Earn More!|
Multiple Lawsuits Plaguing Barclays Bank
Summary: Barclays Bank reveals challenges it faces to investors and defends itself against allegations in lawsuits worldwide.
The Guardian reports that a document recently sent to shareholders by Barclays exposes the extent of the legal problems facing the bank. The document addresses issues such as accusations of “ripping off its own clients,” “rigging interest rates,” and “court tussles.” Barclays is facing years of litigation and multimillion-pound payouts.
Shareholders, who have already protested Barclays’ board’s decision to pay 2.4 billion pounds in bonuses while profits dwindled, will likely be even unhappier with the prospectus. Over 10 percent of the nearly 150 page document was dedicated to “risk factors”—rather, alleged wrongdoing on Barclays’ part. For example, Barclays and nine other banks were accused of manipulating Libor, which sets the cost of credit for borrowers worldwide. Several smaller lenders complained that the artificially low rates lowered their income. Barclays also faces accusations for manipulating equivalent rates for the euro and yen.
The trouble doesn’t end there: Barclays also detailed the $280 million settlement it paid to Fannie Mae and Freddie Mac, two American federal home finance companies, based upon allegations of “selling faulty-mortgage backed securities during the housing bubble.”
Barclays’ biggest challenge is defending itself against the allegation that Barclays took advantage of its customers in “dark pool,” which allowed investors to remain unknown until completion of the trade.
Nevertheless, Barclays has stated it did not expect the cases to have “a material impact,” affecting its profits negatively.
Image credit: WikipediaBarclays Bank Fights to Restore Its Reputation by Noelle Price