By Nate Raymond
NEW YORK, Nov 19 (Reuters) - A U.S. judge on Monday pared
down a federal regulator's lawsuit accusing Barclays Plc of
misleading Fannie Mae and Freddie Mac, which bought risky
mortgage debt worth billions of dollars between October 2005 and
Judge Denise Cote of U.S. District Court in Manhattan
dismissed some claims based on state securities law in the
lawsuit by the Federal Housing Finance Agency, which has sued
Barclays over the purchase of $4.9 billion in mortgage-backed
But the judge said the lawsuit could move forward under
other claims, including federal securities law violations.
Both Stefanie Johnson, a spokeswoman for the FHFA, and
Brandon Ashcraft, a spokesman for Barclays, declined to comment.
The case is one of 18 the FHFA, as conservator of Fannie and
Freddie, filed last year against various banks over purchases of
subprime and other residential-mortgage-backed securities.
Cote presides over 16 of the lawsuits. She previously
declined to dismiss cases against Goldman Sachs Group Inc
, Deutsche Bank AG, Bank of America Corp's Merrill Lynch
unit, JPMorgan Chase & Co and UBS AG.
Many of Barclays' arguments to dismiss the case were similar
to those by other banks. But Cote said Barclays had presented
one argument not previously addressed in her decisions.
Barclays had argued that a Barclays-owned entity and
individual defendants couldn't be held liable under the Virginia
Securities Act for misstatements about securities they didn't
themselves sell to Fannie and Freddie.
Cote agreed, finding that Virginia had sought to ensure that
liability under its securities law was more limited than under
The case is Federal Housing Finance Agency v. Barclays Bank
PLC, U.S. District Court, Southern District of New York,
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