Bollywood Fever: Barclays has requested London’s High Court to more than halve a lawsuit valued up to 560 million pounds ($720 million), filed by shareholders who accuse the British bank of misleading the market regarding its private “dark pool” trading platforms.
The lawsuit, brought by hundreds of institutional investors, stems from a 2014 incident where more than 2 billion pounds were wiped off Barclays’ market value. This significant loss occurred after New York’s attorney general filed a complaint against the bank over a trading system known as “Barclays LX“.
Investors allege that Barclays misled its clients about Barclays LX, a “dark pool” trading venue where orders remain invisible to other traders until execution. They also claim the bank failed to disclose relevant information to shareholders. Barclays settled the New York case in 2016 by agreeing to a $70 million fine, admitting to violating securities laws, and installing an independent monitor.
The London lawsuit is being pursued by shareholders who assert that they relied on information published by Barclays. Others claim they depended on Barclays’ share price or its status as a listed company, which is obligated to make relevant information public.
However, Barclays has filed to dismiss more than half of the case, which represents approximately 330 million pounds of the total claim. The bank’s lawyer, Helen Davies, argued that in a shareholder lawsuit, it is crucial for claimants to have relied on information published by the company. Therefore, she contended, claims by investors who only relied on Barclays’ share value or listed status should not proceed.
Conversely, the investors’ lawyer, Jonathan Nash, insisted that all claimants’ cases should move forward to an initial trial scheduled for October 2025. In court filings, Nash argued that investors in publicly listed companies are “entitled to, and do, trade on the basis that the price of shares of a listed issuer incorporates all material information.”
The outcome of this legal battle will be closely watched, as it addresses the broader issue of investor reliance on publicly disclosed information and the responsibilities of listed companies in maintaining transparency.
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