The logo of Barclays bank is seen at a branch in central London April 20. Barclays has agreed to settle insider trading charges for about US$10.9 million according to court documents filed in New York. - contributed
Barclays Bank has agreed to pay about US$10.9 million to settle charges of illegal insider trading in bond securities, the United States. Securities and Exchange Commission said yestersday.
In court documents filed in New York, the SEC alleged that Barclays and Steven Landzberg, the former head proprietary trader for Barclays' U.S. distressed debt desk, illegally traded millions of dollars of bond securities between March 2002 and September 2003, based on material, non-public information received through bankruptcy creditor committees.
Barclays and Landzberg agreed to the settlements without admitting or denying the allegations, the SEC said.
To settle the charges, Barclays agreed to pay a civil penalty of US$6 million, disgorgement of nearly US$4 million and pre-judgment interest of US$971,825, the market regulator said.
Landzberg, 40, of Waccabuc, New York, will pay a civil penalty of US$750,000, the SEC said. He will be permanently prohibited from participating in any creditors committee in any federal bankruptcy court proceeding involving an issuer of securities, the SEC said.
The complainant charges that Landzberg obtained the non-public information as Barclays representative on six different official creditors committees in bankruptcy proceedings.
Barclays allegedly made illegal trades in notes or securities of Conseco Inc., Galey & Lord Inc. Pueblo Xtra International Inc., Desa International Inc. Archibald Candy Corp. and Air 2 US, a leasing company related to United Airlines parent UAL Corp.
"Barclays' Compliance Department failed to impose informational barriers or otherwise enforce policies or procedures to prevent Landzberg from trading such securities on the basis of material non-public information," the complaint said.
A Barclays spokesman in New York had no comment on the settlement, but pointed to a March regulatory filing from the bank that said it has cooperated with the SEC staff during the commission's investigation.
In the filing, Barclays said it "independently addressed the practices, policies and procedures at issue in 2003, prior to the commencement of the SEC investigation, and none of the employees engaged in such trading activity is currently employed by Barclays".
-AP