Barclays 2015 Annual Report Download - page 306

304 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Notes to the financial statements
Accruals, provisions, contingent liabilities and legal proceedings
29 Legal, competition and regulatory matters continued
Recent Developments
The FCA has agreed that the FCA enforcement process be stayed pending progress in the SFO’s investigation into the agreements referred to above,
in respect of which the Group has received and has continued to respond to requests for further information.
In January 2016, PCP Capital Partners LLP and PCP International Finance Limited (PCP) served a claim on BBPLC seeking damages of £721.4m plus
interest and costs for fraudulent misrepresentation and deceit, arising from alleged statements made by BBPLC to PCP in relation to the terms on
which securities were to be issued to investors, including PCP, in the November 2008 capital raising. BBPLC is defending the claim.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have
upon the Group’s operating results, cash flows or financial position in any particular period. PCP has made a claim against BBPLC totalling £721.4m
plus interest and costs. This amount does not necessarily reflect BBPLC’s potential financial exposure if a ruling were to be made against it.
Investigations into certain business relationships
The DOJ and SEC are undertaking an investigation into whether the Group’s relationships with third parties who assist BPLC to win or retain business
are compliant with the US Foreign Corrupt Practices Act. Certain regulators in other jurisdictions have also been briefed on the investigations.
Separately, the Group is cooperating with the DOJ and SEC in relation to an investigation into certain of its hiring practices in Asia and is keeping
certain regulators in other jurisdictions informed.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have
upon the Group’s operating results, cash flows or financial position in any particular period.
Alternative Trading Systems and High-Frequency Trading
The SEC, the New York State Attorney General (NYAG), the FCA and regulators in certain other jurisdictions have been investigating a range of issues
associated with alternative trading systems (ATSs), including dark pools, and the activities of high-frequency traders. Various parties, including the
NYAG, have filed complaints against BPLC and Barclays Capital Inc. (BCI) and certain of the Group’s current and former officers in connection with
ATS related activities. BPLC and BCI have settled with the NYAG and the SEC, and BCI continues to provide information to other relevant regulatory
authorities in response to their enquiries. BPLC and BCI continue to defend against the class actions described below.
Background Information
Civil complaints have been filed in the New York Federal Court on behalf of a putative class of plaintiffs against BPLC and BCI and others generally
alleging that the defendants violated the federal securities laws by participating in a scheme in which high-frequency trading firms were given
informational and other advantages so that they could manipulate the US securities market to the plaintiffs’ detriment. These complaints were
consolidated (Trader Class Action) and Barclays filed a motion to dismiss this action.
In June 2014, the NYAG filed a complaint (NYAG Complaint) against BPLC and BCI in the Supreme Court of the State of New York (NY Supreme Court)
alleging, amongst other things, that BPLC and BCI engaged in fraud and deceptive practices in connection with LX, the Group’s SEC-registered ATS.
BPLC and BCI have also been named in a class action by an institutional investor client under California law based on allegations similar to those in
the NYAG Complaint. This California class action has been consolidated with the Trader Class Action.
Also, following the filing of the NYAG Complaint, BPLC and BCI were named in a shareholder securities class action along with certain of its former
CEOs, and its current and a former CFO and an employee in Equities Electronic Trading on the basis that investors suffered damages when their
investments in Barclays American Depository Receipts declined in value as a result of the allegations in the NYAG Complaint. BPLC and BCI filed a
motion to dismiss the complaint, which the court granted in part and denied in part. In February 2016, the court granted plaintiffs’ motion to conduct
the litigation as a class action.
Recent Developments
In August 2015, the Court granted Barclays’ motion to dismiss the Trader Class Action, and the plaintiffs have chosen not to appeal. Also in August
2015, the Court granted Barclays’ motion to dismiss the California class action, and later transferred that action to the Central District of California.
The California class action plaintiffs have filed an amended complaint, which Barclays has filed a motion to dismiss.
On 1 February 2016, Barclays reached separate settlement agreements with each of the SEC and the NYAG to resolve those agencies’ claims against
BPLC and BCI relating to the operation of LX for $35m each.
Claimed Amounts/Financial Impact
The remaining complaints seek unspecified monetary damages and injunctive relief. It is not currently practicable to provide an estimate of the
financial impact of the matters in this section or what effect that these matters might have upon operating results, cash flows or the Group’s financial
position in any particular period.