• News
  • Law

SEC said to be investigating claims of improper activities by Barclays traders

WASHINGTON -- The Securities and Exchange Commission is investigating allegations that a head trader in New York for Britain's Barclays PLC (NYSE: BCS) used confidential information on companies in bankruptcy to gain an advantage in trading bonds of the companies, according to a lawsuit.

The head of the debt dealing desk made trades in the companies' bonds in 2002 after getting access to the nonpublic information, Michael Econn, a former analyst who worked on the trading desk, alleged in the suit filed in federal court in Manhattan last month.

Econn said that Barclays, which is Britain's third-largest bank, retaliated against him when he blew the whistle, placing him on "employment probation" and withholding hundreds of thousands of dollars in his compensation. He brought the suit seeking damages under whistleblower provisions of the Sarbanes-Oxley Act and other laws.

Econn said the traders on the desk got access to the "potentially nonpublic information" by joining creditors' committees of companies in bankruptcy proceedings.

Barclays conducted an internal investigation of the trading desk's activities in 2003, and the SEC began its investigation in the spring of 2004 -- issuing a subpoena to the bank in June 2004, according to Econn.

SEC spokesman John Nester declined to comment Thursday.

John Laycock, a spokesman for Barclays in London, also declined to comment on the matter. "We cooperate fully with any regulatory inquiries," he said.

Anne Vladeck, an attorney representing Econn, didn't immediately return a telephone call seeking comment.

Barclays is in a heated takeover battle for Dutch bank ABN Amro NV. A group led by rival Royal Bank of Scotland said Wednesday it was mounting a bid for ABN Amro worth nearly $100 billion that exceeds Barclays' offer by more than 10 percent.

AP Business Writer Jane Wardell in London contributed to this report.


Related Link:

Barclays PLC: www.barclays.com

User Response
0 UserComments