Why did Barclays need to buy back billions of dollars of securities?

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Barclays to Pay US$361 Million to Settle SEC Charges Over Unregistered Securities Sales

Barclays Plc and an affiliate have agreed to pay US$361 million to resolve Securities and Exchange Commission (SEC) charges stemming from the unregistered offer and sale of approximately US$17.7 billion in securities. This action followed the bank's failure to maintain adequate internal controls to monitor such transactions in real time after it lost its designation as a "well-known seasoned issuer" in 2017. The settlement includes a US$200 million civil penalty for Barclays Plc and over US$161 million in disgorgement and prejudgment interest from Barclays Bank PLC, which was satisfied through a prior buyback offer to investors.
Circumstances Leading to the Unregistered Offerings

The SEC's order detailed that an affiliate of Barclays offered and sold roughly US$17.7 billion of securities through unregistered transactions. This occurred subsequent to Barclays losing its status as a "well-known seasoned issuer" in 2017. This designation typically allows larger, well-established companies to efficiently issue securities without the need for extensive SEC review for each offering. Losing this status implies a heightened need for rigorous internal compliance and tracking mechanisms for any subsequent securities issuances to ensure adherence to registration requirements.
Control Deficiencies and Regulatory Breach

A significant factor in the SEC's findings was Barclays' failure to implement any internal controls that could track these types of transactions in real time. The SEC highlighted these control deficiencies as "staggering" in scope, indicating a systemic issue in the bank's oversight of its securities offerings. The unregistered offer and sale of such a substantial volume of securities directly contravened US rules governing the issuance and trading of financial instruments, necessitating regulatory intervention.
Settlement Terms and Prior Financial Impact

The settlement reached with the SEC mandates Barclays Plc to pay a US$200 million civil penalty. Additionally, Barclays Bank PLC is required to pay disgorgement and prejudgment interest exceeding US$161 million. This latter amount was notably satisfied by the bank's prior buyback offer made to investors who had acquired securities in the unregistered offerings. Earlier in July, Barclays had disclosed that its first-half profit was negatively impacted by a £1.9 billion charge for regulatory missteps, which included the costs associated with repurchasing billions of dollars worth of securities that had been erroneously sold.

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Why did Barclays need to buy back billions of dollars of securities?

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