Barclays Bank and its parent Barclays PLC obtained the dismissal with prejudice of two putative securities class actions stemming from the bank’s 2022 over-issuance of securities in excess of the amount registered on a shelf registration statement. In a related third matter, it obtained an order by another court withdrawing its previous decision sustaining a complaint in a stock-drop putative class action.
On March 21, U.S. District Judge District Judge Lewis Liman of the Southern District of New York dismissed litigation brought by two sets of investors in its iPath Series B S&P 500 VIX Short-Term Futures ETNs, an exchange traded note that was one of the securities involved in the over-issuance. In May v. Barclays PLC and Puchtler v. Barclays PLC, he rejected the plaintiffs’ claims that the defendants committed securities fraud by making false statements about the strength and effectiveness of internal controls. He also rejected claims for rescission under Section 12(a)(1) of the Securities Act, misstatements under Section 12(a)(2) and Section 11 of the Securities Act, and common law fraud and promissory estoppel related to a rescission offer.
In a related stock-drop action brought by holders of Barclays PLC’s American Depository Receipts, U.S. District Judge Katherine Polk Failla withdrew her previous decision denying defendants’ motion to dismiss. After S&C moved for reconsideration, arguing that the decision was contrary to controlling Second Circuit authority, Judge Failla withdrew her decision on March 18, citing defendants’ “thoughtful challenges.”
The S&C team included Jeff Scott, Matt Porpora, Julia Malkina, Jacob Cohen, Stephen Clarke, Elizabeth Storey and Marc-Antoine Gervais.