UK-based Barclays PLC (GB:BARC) has resolved its Manhattan lawsuit regarding an older debt issue with a settlement payment of $19.5 million. The allegations stemmed from the shareholders accusing the bank of selling $17.7 billion in debt, exceeding regulatory limits. A preliminary agreement to settle the proposed class action was submitted on Tuesday in Manhattan federal court and awaits approval from U.S. District Judge Katherine Polk Failla.
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Meanwhile, the court document states that Barclays maintained its denial of any wrongdoing in this matter.
Barclays Settles Debt Sale Mishap
The debt sale issue emerged in March 2022, when Barclays revealed it had sold $15.2 billion more in structured and exchange-traded notes over the previous five years than the $20.8 billion authorized by the U.S. regulators. Later on, Barclays raised the oversold amount to $17.7 billion.
Consequently, earlier in 2024, Failla ruled that Barclays must face a class action by its shareholders for failing to disclose the lack of internal controls to identify five years of improper debt sales.
Additionally, Failla pointed out that internal control issues are often too general to warrant a lawsuit. However, Barclays’ case stood out because its system for tracking debt sales was not merely flawed—it was absent. In the lawsuit, shareholders argued that they lost money because they relied on Barclays’ assurances that its policies and procedures complied with regulatory standards.
Is Barclays a Good Stock to Buy?
Barclays shares have surged over 70% so far in 2024, ranking among the top performers on the FTSE 100 Index. The bank’s strategic overhaul, including cost-cutting measures and a renewed business focus, has delivered strong results.
Analysts remain bullish on Barclays stock with a Strong Buy rating. On TipRanks, BARC stock has received unanimous Buy recommendations from 10 analysts. The Barclays share price forecast is 310p, which is 17% higher than the current trading level.
