Case Spotlight: Barclays SEC Fair Fund
The Securities and Exchange Commission (SEC) recently approved the distribution plan for a $200 million Fair Fund involving Barclays, PLC, resolving claims that the bank allegedly committed securities law violations over a multi-year period beginning in 2019.
To participate in this recovery opportunity, eligible Barclays investors must prepare and submit their claim forms before the upcoming deadline.
Background
- Fair Fund distribution amount: $200 million
- Claim deadline: Nov. 29, 2025
- Claim period: Jun. 26, 2019 – Mar. 27, 2022
The SEC determined that Barclays failed to implement internal controls around the real-time tracking of securities offered or sold from its shelf registration statement. As a result, the bank offered and sold more than $17 billion worth of securities above and beyond the amount it had registered with the SEC.
At $200 million, this Fair Fund represents the third-largest recovery opportunity FRT has identified in 2025. It is also the SEC’s largest civil enforcement action of the year by far.
Other factors make the Barclays Fair Fund noteworthy – and complex – for investors.
A Hybrid Recovery with a Two-Stage Allocation Plan
Investors who purchased Barclays American Depositary Receipts (ADRs) on the New York Stock Exchange or Barclays ordinary shares on the London Stock Exchange are eligible to participate in the Barclays Fair Fund. However, investors with eligible ADR losses will have priority when the fund distributes; any Fair Fund dollars remaining after the ADR claims are paid will be distributed to purchasers of Barclays ordinary shares.
SEC Fair Funds often have high claim rejection rates, making it likely there will be extra funds available for the ordinary shareholders – but only if they submit complete and accurate claims before the deadline.
In 2024, British Petroleum (BP) ordinary shareholders were eligible for compensation in a second tranche distribution from the $525 million BP Fair Fund.
Understanding the Loss Formula
The plan of allocation compensates claimants that purchased Barclays ADRs or ordinary shares during the claim period and held those shares through the end of the period. Thus, the loss formula generally favors investors who purchased and held substantial shares later in the claim period (ending Mar. 27, 2022).
In addition, the per share inflation amounts are limited and losses are capped by the lower of that amount or market loss. Given share prices earlier in the claim period were below those at the end, shares purchased earlier likely suffered little or no compensable loss.
While Fair Fund rejection rates can be high, those whose claims are accepted will receive a higher pro rata payout rate than is typical for class action recoveries. They may also receive interest on their payments. The Mylan and Valeant Fair Funds are recent examples of similar “top heavy” distributions.
A Standalone Fair Fund?
SEC Fair Funds typically follow class action settlements. Here, the securities class action arising from the same alleged wrongdoing (Michael Puchtler, et al. v. Barclays PLC, et al.) was dismissed and is on appeal with a Nov. 17 hearing date.
If the lower court dismissal is sustained, this Fair Fund becomes the only opportunity for Barclays investors to participate in a U.S. recovery. If the class action survives on appeal, it could settle for a significant amount. Investors who work to gather the relevant data now would be better positioned to capitalize on any future resolution.
Next Steps
The SEC’s evolving standards have made Fair Fund recoveries more burdensome for investors, with new and existing requirements placing strain on operations teams. For example, the agency demands full documentation for all submitted claims and – more recently – has begun requiring payment of distributions directly to account holders.
Read More: SIFMA Class Actions Panel – Navigating the SEC Fair Funds Landscape
With FRT, investment firms have a dedicated class action expert to help them navigate these SEC Fair Fund requirements. We are implementing creative solutions that automate the recovery process, improve efficiency, and alleviate burdens being placed on internal staff.
If you would like to learn more about this settlement or discuss your filing options, please contact us via the form on this page or by submitting an inquiry.