Robbins Geller Defeats Barclays’ Attempt to Dismiss Securities Case Arising Out of LIBOR Scandal
On October 20, 2014, Judge Shira A. Scheindlin denied defendants’ renewed motion to dismiss the Second Amended Complaint in a securities class action case against Barclays PLC, related Barclays entities, and three senior insiders. The Complaint alleges that, from approximately August 2007 through January 2009, Barclays submitted false submission rates, which were used to calculate the London Interbank Offered Rate ("LIBOR"), in violation of §10(b) of the Securities Exchange Act of 1934. The Complaint also alleges that defendant Robert E. Diamond, Jr., Barclays’ then-CEO, made misleading statements related to LIBOR during a 2008 conference call with market analysts, stating, among other things, that Barclays was "categorically not paying higher rates in any currency."
In denying defendants’ motion to dismiss in its entirety, the Court determined that “Barclays’s repeated, long-term, and knowing submission of false rates . . . constitutes ‘strong circumstantial evidence of conscious misbehavior or recklessness’” sufficient to satisfy the scienter element. Order at 7 (citation omitted). Thus, the Complaint sufficiently alleged that “Barclays’s conduct was – at the very least – ‘highly unreasonable’ and an ‘extreme departure from the standards of ordinary care.’” Id. at 8 (citation omitted).
The Court’s decision can be viewed here.