S&C Obtains Summary Judgment in Securities Class Action Against BarclaysSeptember 13, 2017
After eight years of litigation, Judge Crotty of the U.S. District Court for the Southern District of New York granted summary judgment to Barclays and the other defendants in a 1933 Act Section 11 class action arising out of Barclays's April 8, 2008 offering of $2.5 billion of American Depositary Shares (ADS), Series 5. The lead plaintiff alleged that the offering materials (including Barclays's December 31, 2007 audited financial statements) contained misstatements and omissions concerning (i) the valuation of Barclays's mortgage-related assets; (ii) Barclays's exposure to monoline insurance counterparties; and (iii) Barclays's capital position. After considering the parties' “voluminous submissions,” Judge Crotty issued a 51-page opinion holding that the offering materials did not contain any actionable misstatements or omissions. Alternatively, the Court held that, even if there were any actionable misstatements or omissions, Barclays had carried its burden of establishing “negative causation,” that is, that the alleged misrepresentations did not cause any of the Series 5 ADS price declines during the class period.
The S&C team representing Barclays was led by Michael Tomaino and Thomas White, along with Matthew Peller, Yavar Bathaee, Leila Siddiky, Virginia Hildreth and Oscar Shine.