Barclays wins dismissal of U.S. shareholder lawsuit over Libor

Mon May 13, 2013 5:19pm EDT
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By Jonathan Stempel

(Reuters) - Barclays Plc (BARC.L: Quote), the first bank to settle with authorities over alleged manipulation of the Libor interest rate, on Monday won the dismissal of a U.S. lawsuit by shareholders who claimed they lost money because of the British bank's activity.

U.S. District Judge Shira Scheindlin in Manhattan said investors who owned Barclays' American depositary shares did not show that Barclays and other defendants, including former Chief Executives John Varley and Bob Diamond, misled them about Libor or took too long to reveal potential liabilities.

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 $453 million settlement with U.S. 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.

It was led by the Carpenters Pension Trust Fund of St. Louis in Missouri, and the St. Clair Shores Police & Fire Retirement System in Michigan.

Scheindlin said the plaintiffs will not get a chance to amend their lawsuit, having failed to address previously identified deficiencies in their second amended complaint.

David Rosenfeld, a lawyer for the plaintiffs, did not immediately respond to a request for comment. Barclays spokesman Brandon Ashcraft declined to comment.   Continued...

The logo of Barclays bank is seen at its office in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren