Bloomberg News

Barclays Deferred Prosecution Ends After Judge’s Scrutiny

December 04, 2012

Barclays Plc (BARC)’s deferred prosecution for dealings with sanctioned countries was ended after a U.S. judge weighed whether its admissions in a probe of manipulation of the London interbank offered rate should affect the bank’s agreement with the government.

U.S. District Judge Emmet Sullivan, in a decision made public today, granted a request by the U.S. Justice Department to dismiss the criminal charges pending under the agreement in Washington since 2010. His one-page order offers no explanation.

Sullivan’s ruling comes almost five months after Barclays and prosecutors said in a court filing that the bank’s June 27 settlement of allegations involving Libor has “no effect” on the two-year deferred-prosecution agreement requiring the bank to stay out of criminal trouble.

The judge on June 28 ordered the parties to explain how the Libor settlement affected the 2010 agreement, which involves a $298 million settlement with the U.S. over illegal dealings with such nations as Sudan and Iran.

Barclays, Britain’s second-biggest bank by assets, was fined 290 million pounds ($467 million), the largest penalties ever imposed by regulators in the U.S. and U.K., after admitting it submitted false London and euro interbank offered rates. Part of that fine went to the Justice Department, which agreed not to prosecute the bank for what it called “illegal conduct.”

Mark Lane, a spokesman for London-based Barclays, declined to comment on the dismissal.

Deal’s Terms

Barclays was required to comply with the terms of agreement until Aug. 16. Such agreements allow a company to avoid a criminal conviction as long as the terms of the deal are met.

The accord stated that if the Justice Department determined that Barclays has committed “any federal crime,” the bank could be subject to prosecution for facilitating money transfers that violated U.S. sanctions against Cuba, Libya, Burma, Sudan and Iran from about March 1995 through September 2006.

In an Aug. 31 filing seeking dismissal, the Justice Department said Barclays “fully cooperated” with the U.S. and complied with all of its obligations under the agreement.

The case is U.S. v. Barclays Bank Plc, 10-cr-00218, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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