Robbins Geller Obtains Class Certification on Behalf of Barclays Investors in LIBOR Securities Class Action

August 21, 2015

On August 20, 2015, Judge Shira A. Scheindlin certified a Class of investors in a securities class action case against Barclays PLC, related Barclays entities, and three senior insiders.  The case alleges that Barclays’ London Interbank Offered Rate (“LIBOR”) submissions from August 2007 through January 2009 understated Barclays’ true borrowing costs in violation of §10(b) of the Securities Exchange Act of 1934.  The case also alleges that defendant Robert E. Diamond, Jr., Barclays’ then-CEO, made misleading statements about the LIBOR rates Barclays was paying during a 2008 conference call with market analysts.

In granting class certification, the Court concluded that “plaintiffs have proven by a preponderance of the evidence that the market for Barclays ADS was efficient.”  Order at 49.  In so finding, Judge Scheindlin rejected defendants’ contention that the law requires securities plaintiffs to prove market efficiency with an event study, stating that “[r]equiring a plaintiff to submit proof of market reactions – and to do so with an event study – ignores Supreme Court precedent as well as practical considerations.”  Id. at 32.  The Court went on to note that “Halliburton II makes clear that no specific degree of efficiency is mandated to invoke the Basic presumption.”  Id.   Further, the Court explained that “the net result of Halliburton I and Halliburton II is that at class certification, a plaintiff is not required to prove either price impact – stock price movement based on the fraud – or loss causation – that the misrepresentation caused a subsequent economic loss.”  Id. at 36.  And, because defendants opted not to submit their own event study, the Court easily determined that plaintiffs sufficiently demonstrated market efficiency.  Id. at 37.  The Court also rejected defendants’ Daubert challenge to plaintiffs’ expert, Dr. Finnerty, finding his analyses “readily satisfy” the considerations for reliability.  Id. at 39.

The Court’s Order also noted that defendants “ignore[d] the Supreme Court’s invitation to offer their own evidence to prove lack of price impact.”  Id. at 59.   And, “[b]ecause defendants have not presented compelling evidence of lack of price impact, plaintiffs do not have to present evidence of price impact to satisfy Rule 23(b)(3).”  Id. at 66.

Finally, the Court held that plaintiffs’ damages model “survives the minimal scrutiny under Comcast and Rule 23(b)(3) – their theory of liability matches their theory of damages and individualized damages issues will not predominate.”  Id. at 72.  In so finding, the Court noted that “plaintiffs’ merits expert reports on damages and loss causation are not due until October 7, 2015, and plaintiffs are not required to demonstrate either loss causation or damages for purposes of class certification.”  Id. at 72-73.

In certifying the Class, the Court appointed Robbins Geller as Class Counsel, noting that “Robbins Geller is qualified, and, along with Lead Plaintiffs, will vigorously protect the interests of the Class.”  Id. at 74.

Robbins Geller attorneys David A. Rosenfeld, Robert R. Henssler, Jr., Christopher M. Barrett, Michael G. Capeci and Christopher T. Gilroy are prosecuting the class action for the Firm.

Carpenters Pension Trust Fund of St. Louis v. Barclays PLC, No. 1:12-cv-05329-SAS (S.D.N.Y.).

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