BROOKLYN, N.Y. (Legal Newsline) — The U.S. Department of Justice announced Dec. 22 it has filed a civil complaint against Barclays Bank PLC and many of its affiliates. The department alleges Barclays engaged in a fraudulent scheme to sell residential mortgage-backed securities (RMBS).


“Financial institutions like Barclays occupy a position of vital public trust,” Attorney General Loretta E. Lynch said. “Ordinary Americans depend on their assurances of transparency and legitimacy, and entrust these banks with their valuable savings. As alleged in this complaint, Barclays jeopardized billions of dollars of wealth through practices that were plainly irresponsible and dishonest.  

"With this filing, we are sending a clear message that the Department of Justice will not tolerate the defrauding of investors and the American people.”


From 2005 to 2007, Barclays purportedly misrepresented the characteristics of its RMBS loans that were sold to investors across the globe. Because of the alleged scheme, investors lost billions of dollars. The department alleges Barclays violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).


“The widespread fraud that investment banks like Barclays committed in the packaging and sale of residential mortgage-backed securities injured tens of thousands of investors and significantly contributed to the financial crisis of 2008,” said principal deputy associate attorney general Bill Baer.


Two former Barclays executives were named as additional defendants in the lawsuit: Paul K. Menefee and John T. Carrol. Menefee was the head banker for subprime RMBS securitizations, while Carroll served as the company’s head trader for subprime loan acquisitions.

Want to get notified whenever we write about U.S. Department of Justice ?
Next time we write about U.S. Department of Justice, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. Department of Justice

More News