U.S. Securities and Exchange Commission approves USD 200 million Barclays Fair Fund distribution plan including LSE ordinary share trades over commissioner dissent

The U.S. Securities and Exchange Commission issued an order approving a plan to distribute a Fair Fund funded by Barclays PLC and Barclays Bank PLC’s USD 200 million civil penalty, following claims that Barclays sold securities in excess of what it had registered under a shelf registration. Despite Barclays’ rescission offer, the SEC concluded quantifiable investor losses remained tied to a 3.7% decline in Barclays’ London Stock Exchange-listed ordinary shares and a 3.4% decline in its New York Stock Exchange-traded American Depositary Receipts (ADRs) after the over-issuance was disclosed. The approved plan distributes the Fair Fund in two stages, allocating first to recognized losses on ADRs and then allocating the remaining net available amount to recognized losses on ordinary shares. Recognized losses are calculated as the sum of per-transaction losses for purchases or acquisitions during a defined period, using a price inflation schedule prepared by the SEC’s Division of Economic and Risk Analysis; any remaining funds may be used at staff discretion to pay reasonable interest, with residual amounts paid to the U.S. Treasury. Commissioner Hester M. Peirce dissented, arguing that using the Fair Fund to compensate investors who traded Barclays ordinary shares on a foreign exchange raises policy concerns and may involve an impermissible extraterritorial application of Sarbanes-Oxley Act Section 308(a), while also reducing amounts that would otherwise be deposited in the U.S. Treasury.