Barclays to pay $2bn for losses caused by fraudulent scheme

Barclays to pay $2bn for losses caused by fraudulent scheme
Published: 04 April 2018
BARCLAYS has agreed to pay $2 billion for allegedly causing billions of dollars of losses to investors by engaging in a fraudulent scheme to sell residential mortgage-backed securities between 2005 and 2007, the US justice department said last Thursday.

The department said the firm misled investors about the quality of the mortgage loans backing the deals and committed violations of mail fraud and bank fraud.

According to the department's statement, Barclays disputes the allegations.

The settlement resolves the British bank's largest outstanding legal issue in the US, and could offer reassurance to investors who had been braced for a potentially larger fine.

"I am pleased that we have been able to reach a fair and proportionate settlement with the Department of Justice.

"It has been a priority for this management team from the start to resolve these historic issues in a timely and appropriate manner wherever possible," Barclays CEO Jes Staley said.

Barclays shares were trading 0.7 percent up at 1.32pm GMT following news of the settlement. Barclays said paying the fine would hit its core capital ratio, a key measure of financial strength, by 0.45 percentage points.

Two former Barclays executives, Paul Menefee and John Carroll, who worked on the residential mortgage-backed securities deals paid a combined $2 million in exchange for claims against them being dismissed, the justice department said.

- Reuters
Tags: Barclays,


Latest News

Latest Published Reports

Latest jobs