Barclays Plc and the U.S. Justice Department, engaged in a legal battle over the suspected fraudulent sale of mortgage securities a decade ago, have revived discussions about reaching an out-of-court settlement, Bloomberg News reported yesterday. The Justice Department sued Barclays for fraud in December, in the waning days of the Obama administration, after the bank refused to pay the amount the government sought in negotiations. At the time, Barclays was willing to pay no more than $2 billion to settle the civil matter, while the Justice Department was seeking a far higher penalty. The lawsuit was the government’s first against a bank over the sale of toxic mortgage bonds that helped spur the financial crisis. Other lenders negotiated settlements worth tens of billions of dollars in penalties overall rather than risk drawn-out litigation and possible trials. Deutsche Bank AG accepted a $7.2 billion agreement to resolve its RMBS investigation in December, the same month talks with Barclays collapsed.
