Barclays 2012 Annual Report Download - page 285

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29 Legal Proceedings continued
The original amount of RMBS related to the claims against Barclays in the FHFA cases and the other civil actions against Barclays Bank PLC and/or
certain of its affiliates totalled approximately $8.5bn, of which approximately $2.7bn was outstanding as at 31 December 2012. Cumulative losses
reported on these RMBS as at 31 December 2012 were approximately $0.4bn. If Barclays were to lose these cases Barclays believes it could incur
a loss of up to the outstanding amount of the RMBS at the time of Judgment (taking into account further principal payments after 31 December
2012), plus any cumulative losses on the RMBS at such time and any interest, fees and costs, less the market value of the RMBS at such time.
Barclays has estimated the total market value of the RMBS as at 31 December 2012 to be approximately $1.6bn. Barclays may be entitled to
indemnification for a portion of any losses. These figures do not include two related class actions brought on behalf of a putative class of investors
in RMBS issued by Countrywide and underwritten by BCI and other underwriters, in which Barclays is indemnified by Countrywide.
Devonshire Trust
On 13 January 2009, Barclays commenced an action in the Ontario Superior Court (the Court) seeking an order that its early terminations earlier
that day of two credit default swaps under an ISDA Master Agreement with the Devonshire Trust (Devonshire), an asset-backed commercial paper
conduit trust, were valid. On the same day, Devonshire purported to terminate the swaps on the ground that Barclays had failed to provide
liquidity support to Devonshire’s commercial paper when required to do so. On 7 September 2011, the Court ruled that Barclays early terminations
were invalid, Devonshire’s early terminations were valid and, consequently, Devonshire was entitled to receive back from Barclays cash collateral of
approximately C$533m together with accrued interest thereon. Barclays is appealing the Court’s decision. If the Court’s decision were to be
unaffected by future proceedings, Barclays estimates that its loss would be approximately C$500m, less any impairment provisions taken by
Barclays for this matter.
LIBOR Civil Actions
Barclays and other banks have been named as defendants in class action and non-class action lawsuits pending in United States Federal Courts in
connection with their roles as contributor panel banks to US Dollar LIBOR, the first of which was filed on 15 April 2011. The complaints are
substantially similar and allege, amongst other things, that Barclays and the other banks individually and collectively violated various provisions of
the Sherman Act, the Commodity Exchange Act, the Racketeer Influenced and Corrupt Organizations Act (RICO) and various state laws by
suppressing or otherwise manipulating US Dollar LIBOR rates. The lawsuits seek an unspecified amount of damages and trebling of damages
under the Sherman and RICO Acts. The proposed class actions purport to be brought on behalf of (amongst others) plaintiffs that (i) engaged in
US Dollar LIBOR-linked over-the-counter transactions; (ii) purchased US Dollar LIBOR-linked financial instruments on an exchange; (iii) purchased
US Dollar LIBOR-linked debt securities; (iv) purchased adjustable-rate mortgages linked to US Dollar LIBOR; or (v) issued loans linked to US Dollar
LIBOR.
An additional class action was commenced on 30 April 2012 in the United States District Court for the Southern District of New York (SDNY)
against Barclays and other Japanese Yen LIBOR panel banks by plaintiffs involved in exchange-traded derivatives. The complaint also names
members of the Japanese Bankers Association’s Euroyen TIBOR panel, of which Barclays is not a member. The complaint alleges, amongst other
things, manipulation of the Euroyen TIBOR and Yen LIBOR rates and breaches of US antitrust laws between 2006 and 2010.
A further class action was commenced on 6 July 2012 in the SDNY against Barclays and other EURIBOR panel banks by plaintiffs that purchased or
sold EURIBOR-related financial instruments. The complaint alleges, amongst other things, manipulation of the EURIBOR rate and breaches of the
Sherman Act and the Commodity Exchange Act beginning as early as 1 January 2005 and continuing through to 31 December 2009. On 23
August 2012, the plaintiffs voluntarily dismissed the complaint.
On 21 February 2013, a class action was commenced in the United States District Court for the Northern District of Illinois against Barclays and
other EURIBOR panel banks by plaintiffs that purchased or sold a NYSE LIFFE EURIBOR futures contract. The complaint alleges manipulation of the
EURIBOR rate and violations of the Sherman Act beginning as early as 1 June 2005 and continuing through 30 June 2010.
In addition, Barclays has been granted conditional leniency from the Antitrust Division of the DOJ in connection with potential US antitrust law
violations with respect to financial instruments that reference EURIBOR.
Barclays has also been named as a defendant along with four current and former Barclays officers and directors in a proposed securities class
action pending in the SDNY in connection with Barclays role as a contributor panel bank to LIBOR. The complaint principally alleges that Barclays
Annual Reports for the years 2006-2011 contained misstatements and omissions concerning (amongst other things) Barclays compliance with its
operational risk management processes and certain laws and regulations. The complaint also alleges that Barclays daily US Dollar LIBOR
submissions themselves constituted false statements in violation of US securities law. The complaint is brought on behalf of a proposed class
consisting of all persons or entities (other than the defendants) that purchased Barclays sponsored American Depositary Receipts on an American
securities exchange between 10 July 2007 and 27 June 2012. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities
Exchange Act 1934.
It is not practicable to provide an estimate of the financial impact of the potential exposure of any of the actions described or what effect if any
that they might have upon operating results, cash flows or Barclays financial position in any particular period.
See also Note 30.
barclays.com/annualreport Barclays PLC Annual Report 2012 I 283