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Barclays Pays $2 Billion to Settle Mortgage Securities Suit

Barclays Pays $2 Billion to Settle Mortgage Securities Suit

Barclays agreed to pay $2 billion to the United States for allegedly deceiving investors about the quality of mortgage deals that fuelled the 2008 financial crisis.

The problem consist a rare Justice Department lawsuit that the bank has battled since for the long time. The suit was also unusual in targeting two former executives at the bank, Paul Menefee and John Carroll, who also settled and agreed to pay $2 million to resolve claims without admitting wrongdoing.

Barclays chief executive Jes Staley said that the bank was pleased that they have been able to reach a fair and proportionate settlement. The bank did not admit liability. US attorney for the eastern district of New York Richard Donoghue said that substantial penalty Barclays and its executives have agreed to pay is an important step in recognising the harm that was caused to the national economy and to investors in residential mortgage-backed securities.

Laura Wertheimer, the inspector general for the Federal Housing Finance Agency said that the actions of Barclays and the two individual defendants resulted in enormous losses to the investors who purchased the Residential Mortgage-Backed Securities backed by defective loans.

About Barclays

Barclays lends, invests and protects money for customers and clients worldwide. We have more than 325 years of history and expertise in banking. From our beginnings in Lombard Street, London through to the launch of the world’s first ATM and innovative mobile phone payments services, find out more about our achievements to date.