SEC Investigates Barclays For Its Aggressive Bond Marketing Practices
It was recently reported that the Securities and Exchange Commission is investigating whether Barclays Plc violated securities laws relating to its marketing practices for certain bonds backed by commercial property.
The SEC’s probe allegedly involves sales in 2018 of bonds backed by hotels. The probe allegedly began after Barclays’ former head of commercial real estate trading and distribution, Brian La Belle, filed a lawsuit over his termination. It has been reported that during the lawsuit’s proceedings, La Belle alleged that Barclays may have committed securities fraud in aggressively marketing a deal for bonds backed by hotels.
La Belle allegedly raised concerns that an independent report on the cost of upgrading hotels tied to the loan may have been improperly altered to make the deal appear less risky, according to Reuters. La Belle alleged that the report was changed after Barclays exerted pressure. La Belle further alleged that Barclays ignored his concerns and disregarded basic risk controls and compliance issues.
La Belle subsequently complained to the SEC, according to legal documents. La Belle was fired in August 2018 and is seeking millions of dollars in lost pay, arguing that he was fired for whistle-blowing.
This is not the first time that U.S. authorities have investigated the bank’s bond sales. Last year, Barclays settled with the Justice Department for $2 billion for its sales of securities backed by residential mortgages before the financial crisis of 2008.
Please contact one of our Business Trial Group attorneys at 800-816-1031 if you believe you have a claim relating to improper bond sales by Barclays or another bank or brokerage firm.
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