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The year is only a few days old, but we’re already willing to make at least one prediction about 2011: It’s going to remain a tough slog for securities class action plaintiffs looking to hold financial institutions accountable for losses tied to the subprime meltdown. That’s the big lesson we took from Wednesday’s 20-page ruling by Manhattan federal district court judge Paul Crotty, who rang in the new year by dismissing a securities class action suit against Barclays, current and former bank directors, and a group of underwriters for allegedly misleading investors about Barclays’s exposure to risky mortgage-backed assets from 2006 to 2008. The lead plaintiffs, represented by Robbins Geller Rudman & Dowd and Barroway Topaz Kessler Meltzer & Check, alleged in their February 2010 consolidated amended complaint that Barclays and the other defendants issued materially false and misleading offering materials in four separate offerings of American Depository Shares between April 2006 and April 2008. Investors paid $5.45 billion for the shares, which, according to the plaintiffs, lost about three-quarters of their value by the time the first of the consolidated suits was filed in March 2009. Unlike the most of the credit crisis securities class actions we’ve seen, the Barclays suit did not allege securities fraud or reckless misconduct, but sought damages for strict liability and negligence–which don’t require a showing of scienter. The Barclays shareholders claimed that the defendants failed to adequately disclose the bank’s exposure to the credit markets in their offering documents, failed to meet accounting and Securities and Exchange Commission reporting requirements, and misled investors about Barclays’s risk management practices. Barclays and its lawyers at Sullivan & Cromwell countered in their April 2010 motion to dismiss the suit that the bank adequately disclosed and wrote down all of its mortgage-related assets. They argued that the plaintiffs lacked standing because they didn’t adequately allege that they bought their securities directly from the offerings. In addition, they asserted that the plaintiffs’ allegations on three of the four offerings were time-barred because they filed their claims more than a year after the risks of their investments came to light. The underwriter defendants, represented by Jay Kasner and Scott Musoff of Skadden, Arps, Slate, Meagher & Flom, offered nearly identical arguments in their own motion to dismiss. Judge Crotty agreed with the defendants on every point they put forward and granted dismissal without leave for the plaintiffs to re-plead. “Lead plaintiffs argue that defendants’ disclosures led them to believe that Barclays’ securities were less risky than its competitors’,” the judge wrote. “Barclays, however, offered substantial risk disclosures regarding its valuations….Accordingly, in the absence of ample allegations that Barclays did not truly believe its subjective valuations, lead plaintiffs’ claims must be dismissed.” “We’re very pleased with Judge Crotty’s decision, which dismissed a completely unmeritorious action,” Barclays counsel Michael Tomaino of S&C told us Thursday. Tomaino argued the case at a hearing in December; S&C partner David Braff signed Barclays’ motion to dismiss. The decision also augurs well for other banks accused of misrepresenting the value of their own securities as a result of their exposure in the subprime mortgage crisis. Most of the mortgage-related credit crisis suits to date have been brought by purchasers of securities claiming that lenders and underwriters misrepresented the quality of the underlying loans, not that banks misled investors about the value of their own assets. Co-lead plaintiffs lawyer Samuel Rudman of Robbins Geller didn’t respond to a message seeking comment on the ruling.

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