Barclays agrees to pay $2bn for losses caused by fraudulent scheme

Dianna Christensen
March 30, 2018

Bank of America Corp., which had the largest such settlement, agreed to pay $16.7 billion over its sale of toxic mortgage securities, split between cash and consumer relief.

Major US lenders have already agreed penalties over mortgage-backed security allegations in recent years while HSBC, UBS and Royal Bank of Scotland are still waiting their turn.

It was alleged that it misled those investors about the quality of the home loans backing those deals.

The agreement settles a civil action filed in December 2016 in which the United States sought civil penalties for alleged conduct related to Barclays' underwriting and issuance of residential mortgage-backed securities (RMBS) between 2005 and 2007.

Two former Barclays executives will pay fines as well.

The settlement "is an important step in recognizing the harm that was caused to the national economy, " Richard Donoghue, US attorney for the Eastern District of NY, said in statement.

Paul Menefee, who served as the lead banker of its subprime RMBS securitisation unit, and John Carroll, who worked as the head trader for subprime loan acquisitions will pay a total of $2m.

Parkland Survivor Throws Up on Stage, Continues Speech at Protest
The tragic six minutes, 20 seconds of the whole rampage recollection was hard to hear, but it was needed. Said her mother, Maria Blaeuer: "For our kids, feeling safe is fundamental, and they don't feel safe".

Best bets for the Final Four
Mike Krzyzewski, Roy Williams, Tom Izzo, Rick Pitino , Billy Donovan, Jim Calhoun , Jim Boeheim , Lute Olson and Bob Knight. If there has been anything traditional about this tournament, it has been the notion that defense wins championships.

Kylie Jenner Shares Fitness Goals In Sizzling Pre-Pregnancy Throwback
The star, who dates USA rapper Travis Scott , clearly left her bra at home as her bare assets almost spilled out of her nightgown. Circling the image, the Keeping Up with the Kardashians cast member wrote, "I miss you", underneath the nude snap.

Barclays ultimately opts to come to a pact with U.S. Department of Justice to stir up litigation for packaging and issuance of insolvent mortgage-related debt. In December 2016 Credit Suisse paid $5.3bn as a settlement and to consumers.

Accusing Barclays of fraud in an unprecedented 2016 complaint, the Justice Department described the bank's losses as "catastrophic". The Justice Department claimed that borrowers whose loans backed subprime mortgage deals were significantly less creditworthy than Barclays represented. In addition the mortgaged properties were "systemically worth less" than what had been presented to investors. The DoJ said more than half of the mortgages defaulted.

Mr Staley said: "I am pleased that we have been able to reach a fair and proportionate settlement with the Department of Justice".

The bank last month reported a £1.9bn loss for 2017 after USA tax reforms and an accounting write-down from the sale of its Africa businesses resulted in big one-off charges. The British group agrees to make a disbursement of 2 billion dollars (1.623 billion euros).

Staley said that, because of the settlement and a 2017 restructuring, Barclays is "well positioned" to ramp up profits and return a greater share of its profit to shareholders.

With the settlement now in the rear-view mirror, Barclays said it plans to pay a 6.5 pence dividend for 2018.

Other reports by GlobalViralNews

Discuss This Article