Barclays has won the dismissal of a US lawsuit by shareholders of its American depositary receipts, who claimed they lost money because of the British bank’s activity.
The plaintiffs alleged that Barclays and its executives duped investors in Barclays American Depositary Shares by concealing the bank’s part in the LIBOR scandal. They also claimed that Barclays failed to disclose contingent liabilities as required by regulators.
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US District Judge, Shira Scheindlin, in Manhattan, however, concluded that the shareholders couldn’t show that Barclays intended to deceive them or that the bank’s alleged misrepresentations caused their losses.
She also said the investors failed to show that alleged Libor manipulation between August 2007 and January 2009 caused them to lose money through June 2012, when Barclays reached a US$453 million settlement with US and European regulators.
"The notion that the market would fail to digest three years of non-fraudulent submission rates and other more detailed financial information, and would instead leave intact artificial inflation as a result of fraudulent submission rates during the financial crisis is implausible," Scheindlin wrote.
The lawsuit had sought class-action status, and been brought on behalf of ADS purchasers between July 2007 and June 2012.
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By GlobalDataAmerican and European regulators are still probing whether banks artificially depressed Libor during the financial crisis to appear healthier.
In December last year, UBS AG agreed to pay US$1.5 billion and Royal Bank of Scotland Group agreed in February to pay US$612 million to settle with authorities over Libor.
