Barclays Plc and the U.S. Justice Department missed a deadline for filing reports on the bank’s cooperation with the government under a deferred-prosecution agreement over its dealings with nations including Iran.
U.S. District Judge Emmet Sullivan demanded today in Washington that lawyers for the bank and the government file separate status reports by noon on Nov. 18. An Aug. 18 court order stated the reports were due by Nov. 2, he said.
“This is inexcusable and unacceptable,” Sullivan said. “I am amazed that with all the legal talent before the court that no one opened the order to read it.”
Lawyers for the U.S. and Barclays said they didn’t realize they were required to file the reports until this morning. In the August ruling, Sullivan approved Barclays’s $298 million settlement with the U.S. over claims the bank violated financial sanctions against Cuba, Libya, Burma, Sudan and Iran from about March 1995 through September 2006.
“I always read orders,” Kevin Gerrity, a trial attorney in the Justice Department, told the judge. “I don’t know how this happened. I have no explanation at all.”
Barclays, based in London, followed the instructions of banks in the sanctioned countries to omit their names in payment messages sent to the New York branch and to other financial institutions, according to court papers. Barclays also amended payment messages to remove information identifying links to sanctioned companies, prosecutors said.
A day before approving the Barclays accord, Sullivan called it a “sweetheart deal” and demanded more information from the bank and prosecutors. He criticized the Justice Department for failing to go after individuals and punishing only the company’s shareholders.
The agreement, which is in place for 24 months, requires Barclays to cooperate with any federal government agency probing the deals with restricted countries.
In the Aug. 18 order approving the agreement, Sullivan said both sides were required to file status reports that “shall inform the Court what progress has been made under the terms of the Deferred Prosecution Agreement.” In particular, Sullivan said he wanted to know about the steps Barclays has taken to make its current and former officers, consultants, and employees available to federal investigators and the progress of implementing compliance procedures.
“This is a fairly unusual arrangement,” Sullivan said in court today. “I wanted to know what’s happened since the last hearing.” Sullivan said both sides must appear before him on Nov. 23 and said Barclays’ general counsel Mark Harding must be there.
Barclays fell 8.65 pence to 273.8 pence in London trading. The shares have declined 15 percent in the past year.
The case is U.S. v. Barclays Bank Plc, 10-cr-218, U.S. District Court, District of Columbia (Washington).
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