Barclays Sued for $326 Million in Dutch Derivatives Case

(Bloomberg) --

Barclays Plc was sued for 279 million euros ($326 million) for its alleged involvement in a derivatives debacle that nearly put a Dutch affordable-housing provider out of business.

Stichting Vestia came close to collapse in 2012, after racking up more than 2 billion euros in losses after derivatives that were supposed to be part of a hedging strategy were found to be flawed because of bribes. It previously sued a number of banks, including Deutsche Bank AG, over the issue and in July turned its efforts to Barclays when it filed a separate suit against the British lender.

The bank is accused of paying commissions on derivative transactions with Vestia between 2008 and 2011 to an intermediary that totaled over 1.5 million euros, according to documents filed by Vestia last month at the U.K. High Court. Vestia’s treasurer at the time, who was accused of being bribed, received approximately half of all the commissions, lawyers for the housing firm said in the filings. 

“Barclays has been enriched at Vestia’s expense as a result of these transactions,” the lawyers said. “Vestia is entitled to recover in restitution the amount by which Barclays has been enriched by such void transactions.” 

The housing provider alleged that Barclays “failed to make such inquiries as a reasonable person would make” into the transactions.

Barclays declined to comment on the suit.

Vestia’s trial against Deutsche Bank, which eventually settled for 175 million euros, shed light on how the German lender entertained its clients. Tales of outings to Michelin-starred restaurants and exclusive London nightclubs, where bottles of Dom Perignon champagne were free flowing, formed part of Vestia’s case. 

“It is Vestia’s policy to recover the damage caused by the derivatives debacle from those who caused the damage directly or indirectly,” Vestia said in a statement. It’s also agreed settlements with Citigroup Inc. and ABN Amro Bank NV and its cases against BNP Paribas SA and Societe Generale SA in London are ongoing, it said.

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