A proposed class of shareholders and their lawyers are back in the saddle in a major securities case against Barclays, bank directors and a group of underwriters that allegedly misled investors about the bank's exposure to risky mortgage-backed assets during the financial crisis. The U.S. Court of Appeals for the Second Circuit partly revived the case on Monday, giving plaintiffs lawyers at Robbins Geller Rudman & Dowd and Kessler Topaz Meltzer & Check another shot at pressing claims related to $2.5 billion in American Depository shares.
The investors sued in March 2009, claiming the defendants misled investors about Barclays' risk management practices and failed to adequately disclose the bank's exposure to the credit markets between April 2006 and April 2008. The plaintiffs claimed they were misled by offering documents for four series of American Depository shares that lost about three-quarters of their $5.45 billion value by the time the suit was filed. Unlike many subprime-era securities class actions, the Barclays suit didn't allege securities fraud—which requires a showing of scienter—but claimed damages for strict liability and negligence.
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