Southern District of New York Rejects 1933 Act Claims Based on Events Post-Dating an Issuer’s Financial Statements: Issuer in April 2008 Offering Had No Duty To Disclose Additional Information Concerning Events of the First Quarter of 2008. District Court Also Holds that Defendants Carried Their Burden of Proving that Class Period Share Price Declines Were Not Caused by Alleged Misrepresentations.Sullivan & Cromwell LLP - September 15, 2017
On September 13, 2017, the U.S. District Court for the Southern District of New York (Crotty, J.) granted summary judgment to Barclays and the other defendants in a 1933 Act class action arising out of Barclays’ April 8, 2008 offering of $2.5 billion of American Depositary Shares (ADS). Plaintiff’s claims rested largely on purported omissions from the offering materials, which included Barclays’ 2007 year-end financial statements. Specifically, plaintiff contended that Barclays had a duty to disclose additional information concerning (i) the valuations and writedowns of Barclays’ mortgage-related assets; (ii) Barclays’ exposure to monoline insurance counterparties; and (iii) changes in Barclays’ capital ratios during the first quarter of 2008, just prior to the offering. The Court rejected these claims, holding that Barclays satisfied its disclosure obligations.