Summary of Case:
A securities class action has been filed against Barclays Bank PLC (Ticker: BCS-P) ("Barclays" or the "Company") on behalf of all persons who acquired the American Depository Shares, Series 2 ("Preferred Stock") of Barclays pursuant and/or traceable to a false and misleading registration statement and prospectus (collectively, the "Registration Statement") issued in connection with the Company's April 2006 offering of the Company's Preferred Stock representing 6.625% Dollar-Denominated Non-Cumulative Callable Preference Shares, Series 2 (the "Offering").
The complaint alleges that Defendants consummated the Offering pursuant to a false and misleading Registration Statement, selling 30 million shares at $25 per share (including the over-allotment), for proceeds of over $750 million. Then, in August 2008, Barclays announced huge multi-billion dollar impairment charges associated with its exposure to mortgage-related securities. Notwithstanding these huge write-downs, Barclays' securities, including the Preferred Stock, did not decline appreciably due to Barclays' assurances it did not require additional capital after raising £4.5 billion in a share sale in July. However, in mid-November 2008, Barclays was forced to acknowledge that it would indeed need to raise additional capital, and the price of the Preferred Stock fell to as low as $8.30 per share.
Moreover, the Registration Statement for the Offering was false and misleading because it omitted the following true facts: (a) Barclays' portfolio of mortgage-related securities was impaired to a much larger extent than had been disclosed; (b) defendants failed to properly record losses for impaired assets; (c) Barclays' internal controls were inadequate to prevent the Company from improperly reporting its mortgage-related investments; and (d) Barclays was not as well capitalized as represented and would have to continually raise additional capital, which would dilute current holders and those investors purchasing Preferred Stock in the Offering.
