Barclays 2015 Annual Report Download - page 315

home.barclays/annualreport Barclays PLC Annual Report 2015 I 313
29 Legal, competition and regulatory matters continued
Investigation into suspected money laundering related to foreign exchange transactions in South African operation
Absa Bank Limited, a subsidiary of Barclays Africa Group Limited, has identified potentially fraudulent activity by certain of its customers using import
advance payments to effect foreign exchange transfers from South Africa to beneficiary accounts located in Asia, UK, Europe and the US. As a result,
the Group is conducting a review of relevant activity, processes, systems and controls. The Group is keeping relevant agencies and regulators
informed as to the ongoing status of this matter.
It is too early to assess reliably the outcome.
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.
Portuguese Competition Authority Investigation
The Portuguese Competition Authority is investigating whether competition law was infringed by the exchange of information about retail credit
products amongst 15 banks in Portugal, including the Group, over a period of 11 years with particular reference to mortgages, consumer lending and
lending to small and medium enterprises. The Group is cooperating with the investigation.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of these matters or what effect that they may have upon operating
results, cash flows or the Group’s financial position in any particular period.
Credit Default Swap (CDS) Antitrust Investigations and Civil Actions
The Commission and the DOJ-AD commenced investigations into the CDS market, in 2011 and 2009, respectively. In December 2015 the
Commission announced its decision to close its investigations in respect of BBPLC and 12 other banks. The Commission continues to pursue its case
in respect of Markit Ltd. and ISDA, which could indirectly expose BBPLC to financial loss. The case relates to concerns about actions to delay and
prevent the emergence of exchange traded credit derivative products.
The DOJ-AD’s investigation is a civil investigation and relates to similar issues.
In September 2015, BBPLC settled a proposed, consolidated class action that had been filed in the US alleging similar issues for $178m subject to
court approval.
Claimed Amounts/Financial Impact
Aside from the settlement discussed above, 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.
Lehman Brothers
Since September 2009, BCI and BBPLC have been engaged in litigation with various entities that have sought to challenge certain aspects of the
transaction pursuant to which BCI, BBPLC and other companies in the Group acquired most of the assets of Lehman Brothers Inc. in September
2008, as well as the court order (Order) approving the sale (Sale). All of the claims challenging the Sale were ultimately resolved in favour of BCI. In
May 2015, BCI and BBPLC reached a settlement with the SIPA Trustee for Lehman Brothers Inc. (Trustee) to resolve the remaining outstanding
litigation between them relating to the Sale. Pursuant to the settlement, BBPLC has received all of the assets that BBPLC asserted it was entitled to
receive with the exception of $80m of assets that the Trustee is entitled to retain and approximately $0.3bn of margin for exchange-traded
derivatives still owed to BBPLC but expected to be received from third parties. The settlement was approved by the United States Bankruptcy Court
for the SDNY on 29 June 2015, thereby bringing the litigation relating to the Sale to an end.
General
The Group is engaged in various other legal, competition and regulatory matters both in the UK and a number of overseas jurisdictions. It is subject
to legal proceedings by and against the Group which arise in the ordinary course of business from time to time, including (but not limited to)
disputes in relation to contracts, securities, debt collection, consumer credit, fraud, trusts, client assets, competition, data protection, money
laundering, financial crime, employment, environmental and other statutory and common law issues.
The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal and other proceedings by
regulators, governmental and other public bodies in connection with (but not limited to) consumer protection measures, compliance with legislation
and regulation, wholesale trading activity and other areas of banking and business activities in which the Group is or has been engaged. The Group
is keeping all relevant agencies briefed as appropriate in relation to these matters and others described in this note on an ongoing basis.
At the present time, the Group does not expect the ultimate resolution of any of these other matters to have a material adverse effect on its financial
position. However, in light of the uncertainties involved in such matters and the matters specifically described in this note, there can be no assurance
that the outcome of a particular matter or matters will not be material to the Group’s operating results or cash flows for a particular period,
depending on, among other things, the amount of the loss resulting from the matter(s) and the amount of income otherwise reported for the
reporting period.
The Strategic Report Governance Risk review Financial review Financial statements Shareholder information