A previously dismissed investor lawsuit claiming Barclays Plc failed to disclose its full credit-market risk in offerings for $5.45 billion in American depositary shares was partly revived by an appeals court.
The federal appeals court in Manhattan said today that the investors may go forward with claims over a $2.5 billion share offering in April 2008, reversing a 2011 lower-court ruling that they couldn’t sue over Barclays’s asset valuation and writedown decisions. The panel agreed with the lower court that claims based on three earlier offerings were filed too late.
A group of investors filed the suit in 2009 seeking to represent buyers of 218 million Barclays shares at $25 each. The investors claimed Barclays should have disclosed losses on mortgage-backed securities as mortgage delinquencies and defaults triggered an August 2008 writedown.
Brandon Ashcraft, a spokesman for London-based Barclays, declined to comment on the ruling.
The case is Freidus v. Barclays Bank Plc, 11-2665, U.S. Court of Appeals for the Second Circuit (Manhattan).