The U.S. Department of Justice has quietly revived negotiations with Barclays Plc to reach an out-of-court settlement regarding the London-based bank’s sale of problematic mortgage securities in the run-up to the Great Recession.
According to a Bloomberg report
citing “people with knowledge of the situation,” Barclays made the request to begin negotiations. The Justice Department sued Barclays last December when the bank refused to agree to the government’s terms for a settlement—the bank reportedly refused to pay more than $2 billion in a settlement, which the government wanted substantially more. The lawsuit, in which Barclays was accused of deceiving investors between 2005 and 2007 on the quality of more than $31 billion in loans backing the securities, was the first by the federal government against a bank over the pre-Great Recession sale of mortgage bonds that ultimately proved toxic.
Both the Justice Department and Barclays declined to comment on the report.