Barclays shareholders sue in U.S. over $17.6 bln debt sale blunder

Barclays Plc BARC.L was sued on Friday in a proposed U.S. class action in which shareholders claimed they were defrauded in connection with the British bank’s sale of $17.6 billion more debt than regulators had allowed.

A complaint filed in the U.S. District Court in Manhattan by two Florida pension plans seeks to hold Barclays responsible for declines in the prices of its American depositary receipts (ADR)as costs mounted over the blunder.

The complaint said Barclays made materially false and misleading assurances in its annual reports that its internal controls over financial reporting were effective.

It also said the bank overstated profit, and understated operating and litigation and conduct expenses, by failing to disclose the overissuance in its 2021 earnings releases.

The failure to have controls in place to account for the number of securities issued against the number of securities registered is such an elementary failure of internal control that is so obvious as to be deliberately reckless, the complaint said.