Barclays agrees US$2bn settlement in USA over mortgage-backed securities lawsuit

Barclays agrees US$2bn settlement in USA over mortgage-backed securities lawsuit

Barclays finalized an agreement to pay U.S. authorities $2 billion to settle claims that it misled investors with residential mortgage-backed securities it sold in the run-up to the 2008 financial crisis, the U.S. Department of Justice said on Thursday.

Barclays chief executive Jes Staley said the bank was pleased to reach a " fair and proportionate settlement" but did not admit liability.

The settlement makes Barclays the latest major bank to be sanctioned for crisis-era fraud almost a decade after the collapse of major NY financial institutions dealing in mortgage-backed derivatives sparked a global recession.

"The settlement is at the bottom end of expectations and has come sooner than expected, so this is a good outcome for Barclays", Ian Gordon, analyst at Investec Bank in London, said.

British bank Barclays became the latest big bank to reach a multi-billion dollar settlement with US authorities over its role in the subprime mortgage bubble and subsequent financial crisis.

"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", Staley said.

Barclays said paying the fine would hit its core capital ratio, a key measure of financial strength, by 0.45 percentage points.

Doom Patch Adds 4K Support for PS4 Pro, Xbox One X Tomorrow
There are three packs in total containing nine maps, three playable demons, three guns, and some equipment and armor sets. Despite coming out in 2016, DOOM is still being updated, and the most recent addition is 4K support on two consoles.

Barclays shares were up 1 percent by 1445 GMT following the announcement.

After a three-year investigation, federal prosecutors accused Barclays of a fraudulent scheme from 2005 to 2007 involving 36 deals in RMBS initially valued at US$31 billion.

Barclays said the settlement resolves "all actual and potential civil claims by the DoJ" relating to securitisation, underwriting and sale of mortgage-backed securities in the period 2005-2007.

The two former Barclays executives named as defendants in the suit are Paul Menefee, who was the lender's head banker on its subprime RMBS securitisations, and John Carroll, who served as head trader for subprime loan acquisitions.

It alleged that the borrowers whose loans backed those deals were "significantly less trustworthy" than Barclays made them out to be, while the mortgaged properties were "systemically worth less" than what had been presented to investors. The Justice Department balked and sued that December.

The final deal is lower than the $5 billion sum that the US authorities had asked Barclays to pay earlier in negotiations, as reported back in 2016.

Related Articles