Coughlin Stoia Geller Rudman & Robbins has commenced a class action lawsuit in the US District Court for the Southern District of New York on behalf of all persons who acquired preferred securities pursuant or traceable to the materially false and misleading registration statements filed with the US Securities and Exchange Commission on September 14, 2005 and August 31, 2007 by Barclays Bank.
These preferred securities include the non-cumulative callable dollar preference shares, series 2, series 3, series 4 and series 5, sold in the form of American depository shares, offered in April 2006, September 2007, December 2007 and April 2008, respectively (the offerings).
The complaint charges Barclays Bank Plc (Barclays Bank), its senior insiders, Barclays Plc (Barclays), the underwriters of the offerings and Barclays Bank’s auditor with violations of the Securities Act of 1933.
The complaint alleges that from April 2006 through April 2008, Barclays Bank consummated the offerings of the securities pursuant to the false and misleading registration statements filed with the US Securities and Exchange Commission on September 14, 2005 and August 31, 2007 (collectively, the registration statements), selling 218m shares of the securities at $25 per share for proceeds of $5.45 billion. After the offerings, Barclays Bank announced huge multi-billion dollar impairment charges associated with its exposure to mortgage-related securities, causing the prices of the securities to decline.
According to the complaint, the true facts which were omitted from the registration statements were: Barclays’s portfolio of mortgage-related securities was impaired to a much larger extent than had been disclosed; defendants failed to properly record losses for impaired assets; Barclays’s internal controls were inadequate to prevent the company from improperly reporting its mortgage-related investments; and Barclays was not as well capitalised as represented and would have to continually raise additional capital, which would dilute current holders and those investors purchasing the securities in the offerings.
The plaintiff, who is represented by Coughlin Stoia, seeks to recover damages on behalf of all persons who acquired the securities pursuant and/or traceable to the registration statements issued in connection with the offerings.
