A United States Appeals Court announced Monday that investors may revive a lawsuit accusing Barclays PLC of misleading them in a stock offering deal in 2008. The alleged deal was on mortgage exposure and Barclays' ability to handle credit risks.
The new decision from the 2nd US Circuit Court of Appeals in New York was a revision of a prior decision issued by a lower court. The appeals court said that investors may file a lawsuit against Barclays and its underwriters over a USD2.5 billion deal. The latter offered American depositary shares in 2008 that had its value lost within the same year. Soon after the value losses, Barclays announced raising a large capital plan.
The lawsuit is among many others accusing major financial institutions of inflating their share prices through concealment or slow reports on deteriorating credit condition. However, claims between April 2006 and November 2007 offerings were dismissed after the panel announced that plaintiffs failed to sue Barclays during the one year deadline.
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