- Settlement resolves claims that bank sold faulty securities
- Credit unions bought more than $555 million of mortgage bonds
Barclays Plc will pay $325 million to settle a U.S. regulator’s allegations that it misled credit unions in the sale of mortgage-backed securities.
The accord resolves 2012 lawsuits that the National Credit Union Administration filed against a U.S. investment-banking unit of the London-based lender. The regulator accused the Barclays unit of selling more than $555 million of securities to U.S. Central Federal Credit Union and Western Corporate Federal Credit Union, while misleading the buyers about the quality of the underlying loans.
“In order to help minimize losses and future costs to the credit union system, NCUA is committed to pursuing recoveries against financial firms we maintain contributed to the corporate crisis,” board Chairman Debbie Matz said in a statement announcing the settlement.
The NCUA said it agreed to dismiss suits in New York and Kansas federal courts against Barclays. The Alexandria, Virginia-based regulator said it is still pursuing suits against other financial firms, including Goldman Sachs Group Inc., UBS AG, Credit Suisse Group AG and Morgan Stanley, based on their sales of faulty securities that contributed to the failures of five corporate credit unions following the 2008 financial crisis.
Barclays, which didn’t admit fault in the accord, released a statement confirming the settlement of “two outstanding civil lawsuits” and said it continued to litigate against other residential mortgage-backed securities claims.