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U.S. District Judge Katherine Polk Failla in Manhattan said shareholders adequately alleged that Barclays’ failure to disclose the absence of internal controls to catch the error was a material omission of fact.
She also said shareholders can try to prove that Barclays and several officials, including former Chief Executive Jes Staley, were “actionably reckless” in reassuring them that the bank was complying with federal securities laws.
The judge nonetheless said the shareholders could not pursue a securities fraud claim over statements that Barclays made after the overissuances were discovered.
Barclays did not immediately respond to requests for comment. Lawyers for the shareholders did not immediately respond to similar requests.
