56014
Barclays to Challenge US Claims
World Economy

Barclays to Challenge US Claims

The US Justice Department sued Barclays Plc for fraud over its sale of mortgage bonds after the bank balked at paying the amount the government sought in settlement negotiations.
The lawsuit announced on Thursday is rare for big banks, which typically negotiate a settlement with the government rather than risk drawn-out litigation and a possible trial. The breakdown in talks suggests that the bank is willing to take its chances with incoming enforcement officials in the Trump administration. The bank has lined up a law firm whose top lawyer is known for his aggressive defense of clients, including Lt. Col. Oliver North, Bloomberg reported.
Barclays is one of a handful of European lenders, including HSBC Holdings Plc, Credit Suisse Group AG, UBS Group AG and Royal Bank of Scotland Group Plc, which have yet to settle long-running US probes into their sale of mortgage bonds ahead of the financial crisis. The Barclays lawsuit marks the first time the Justice Department has sued one of the banks at the center of an Obama administration initiative to recoup investor losses on the securities. The US has extracted more than $46 billion from six US financial institutions thus far.
Barclays executives tried to draw the line at $2 billion in penalties to settle with the government, which made an opening offer it deemed too high, a person familiar with the situation told Bloomberg in October. The Justice Department’s starting point for negotiations wasn’t disclosed.
“Barclays jeopardized billions of dollars of wealth through practices that were plainly irresponsible and dishonest,” Attorney General Loretta Lynch said in a written statement. “We are sending a clear message that the Department of Justice will not tolerate the defrauding of investors and the American people.”
Barclays rejected the government’s accusations. “Barclays considers that the claims made in the complaint are disconnected from the facts,” it said in a statement. “We have an obligation to our shareholders, customers, clients and employees to defend ourselves against unreasonable allegations and demands.”
The British bank repeatedly deceived investors about the quality of more than $31 billion in loans backing the securities that were sold between 2005 and 2007, the Justice Department said in a complaint filed Thursday in federal court in Brooklyn. More than half of the underlying loans defaulted, the government said, causing billions of dollars in losses for investors. Consultants who reviewed the loans called them “craptacular” and said they bore the “distinct aroma of default,” according to the complaint.

Short URL : https://goo.gl/llLgje
  1. https://goo.gl/wvB8iw
  • https://goo.gl/NVLHTh
  • https://goo.gl/HA350F
  • https://goo.gl/rB5Q4n
  • https://goo.gl/xxOyxH

You can also read ...

Business confidence fell to its lowest level since August 2013 and around 7% of companies expected a contraction.
According to data from the International Monetary Fund in...
China Warned of Ballooning SOEs
Former chief of the World Bank Robert Zoellick cautioned China...
Shrinking unemployment in the US, Japan and the eurozone finally forces companies  to lift wages to retain and attract staff.
Workers in the world's richest countries are getting their...
New Zealand Q2 GDP Growth Picking Up
New Zealand’s economic growth is expected to have accelerated...
Saudi Sovereign Fund Secures $11 Billion Loan
Saudi Arabia's sovereign wealth fund said Monday it had...
Lira Eases Against Dollar
Turkey’s lira weakened against the dollar on Monday as...
By 2025 more than half of all current workplace tasks  will be performed by machines.
Robots will handle 52% of current work tasks by 2025, almost...
Myanmar Businesses Want Lower Taxes
Myanmar businesses are urging the government to lower the...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus