Barclays Wins Legal Battle Over Shareholders' Lawsuit

LONDON (Reuters) – Barclays on Friday won its bid to more than halve a shareholders' lawsuit worth up to £560 million ($727 million) at London's High Court for allegedly misleading the market about its private "dark pool" trading platforms.

A judge ruled that investors who only relied on Barclays share value or listed status could not continue with their claims, and he expressed hopes that this would improve the chances of an early settlement.

Hundreds of institutional investors are suing after more than £2 billion was wiped off Barclays' value in 2014, when New York's attorney general filed a complaint over the trading system known as "Barclays LX".

The investors contend that Barclays misled its clients regarding Barclays LX—a "dark pool" trading venue where orders are not visible to other traders until execution—and failed to publish relevant information to shareholders.

Barclays applied in July to dismiss more than half of the case, amounting to approximately £330 million, which Judge Thomas Leech allowed on Friday.

The bank's lawyer, Helen Davies, argued that it was critical in a shareholder lawsuit for claimants to have relied on information published by a listed company.

Leech remarked that the claims from investors relying solely on Barclays' status as a listed company or its share price involved 241 different funds and totaled £332 million, constituting 60% of the overall claims.

"If I dispose of those claims on a summary basis, this ought to reduce the scope of the claims considerably and promote an early settlement," Leech ruled. "I will, therefore, do so.",