Aug. 17 (Bloomberg) -- A federal judge questioned Barclays Plc’s $298 million settlement with the U.S. government over dealings with banks under U.S. sanctions, calling the accord a “sweetheart deal.”
U.S. District Judge Emmet Sullivan in Washington said today the settlement “concerns the court” and he scheduled a hearing for tomorrow to further discuss it. Unlike Barclays, the average American caught robbing a bank doesn’t get deferred prosecution and the option of returning ill-gotten gains, he said.
“Why isn’t the government getting tough with the banks?” Sullivan asked.
Under a deferred-prosecution agreement filed in court yesterday, London-based Barclays agreed to pay $149 million to the U.S. and another $149 million to New York state. Barclays was accused of violating U.S. financial sanctions against Cuba, Iran, Libya, Sudan and Burma from about March 1995 through September 2006.
Frederick Reynolds, an attorney for the U.S., said the settlement is fair and “in excess of what the company earned.” Michael O’Looney, a spokesman for Barclays Capital, declined to comment.
At least two other federal judges in the past year have rejected banks’ settlements with the U.S. or sought further information before allowing them to proceed. Citigroup Inc.’s $75 million settlement with the Securities and Exchange Commission was held up yesterday by a judge.
Bank of America
U.S. District Judge Ellen Huvelle in Washington said she wasn’t satisfied with the written proposal and told attorneys to submit a new court filings starting Sept. 8.
In February, a federal judge in New York approved the SEC’s $150 million settlement with Bank of America Corp. over alleged misstatements about the purchase of Merrill Lynch & Co. after initially rejecting a $33 million accord.
U.S. District Judge Jed S. Rakoff in New York said he “reluctantly” approved the settlement of two SEC lawsuits accusing the Charlotte, North Carolina-based bank of misleading investors. He criticized the accord as “half-baked justice at best” and “inadequate and misguided,” though an improvement over the earlier version.
The case is U.S. v. Barclays Bank Plc, 10cr218, U.S. District Court, District of Columbia (Washington).
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