Barclays PLC won dismissal of a lawsuit by holders of its American depository receipts who claimed the U.K. bank misled shareholders about its manipulation of the London interbank offered rate.
U.S. District Judge Shira Scheindlin on Monday dismissed the suit, filed last year, on behalf of a class of investors who bought Barclays' ADRs between July 10, 2007, and June 27, 2012. Ms. Scheindlin said the alleged misstatements didn't violate the law or lacked a sufficient connection to Barclays' practices with regard to LIBOR.
The judge concluded the complaint suffers from “fundamental deficiencies under the securities laws” and that it would be “futile” to let the investors refile it.
The investors, led by the $1.7 billion St. Louis Carpenters Pension Trust Fund and $1.1 million St. Clair Shores (Mich.) Police & Fire Retirement System, claimed Barclays violated U.S. securities laws through misstatements in financial filings, in a conference call with analysts and in the rates it submitted for use in setting LIBOR. The plaintiffs also claimed Barclays failed to disclose contingent liabilities as required by regulators.
LIBOR is a key metric for setting interest rates for trillions of dollars in financial instruments. It fixes the rates under which banks lend money to one another for as little as a day and as long as a year. Rates for 10 different currencies including the U.S. dollar, Japanese yen and British pound are computed daily after canvassing banks whose representatives compose membership panels for each type of money.
Global authorities have been investigating claims that more than a dozen banks altered submissions used to set benchmarks such as LIBOR to profit from bets on interest-rate derivatives or make the lenders' finances appear healthier.
Barclays agreed to pay £290 million ($441 million) and Royal Bank of Scotland Group paid $612 million to U.S. and U.K. regulators to resolve claims. UBS AG agreed to pay 1.4 billion Swiss francs ($1.47 billion).