Courts: Barclays Breached Client Trust in Carbon Deal

Barclays has settled a lawsuit with London trading firm CF Partners after a judge found that the British bank had misused confidential information during its acquisition of a Swedish carbon trading company.

The ruling comes the same week Barclays was hit with a combined $77 million in fines from British and U.S. regulators as the lender continues to be dogged by problems from its past.

Barclays is trying to improve standards and its corporate culture after being rocked by a series of scandals -- including the mis-selling of loan insurance and the attempted manipulation of Libor interest rate.

CF Partners approached Barclays in 2008 for advice on debt financing for its plan to buy the Swedish firm Tricorona AB.

CF Partners said it gave Barclays confidential information about Tricorona's potential value and signed a confidentiality agreement with the bank.

Barclays then bought Tricorona itself in 2010. The bank said CF Partners had abandoned its acquisition attempt during 2008 after carbon credit prices plummeted.

CF Partners, however, argued it had only temporarily delayed its plan and demanded compensation of 96 million euros from Barclays. It launched the lawsuit against Barclays in 2012.

High court judge Robert Hildyard ruled that both Barclays and Tricorona had misused the confidential information provided by CF Partners to establish their own "strategic partnership".

He ruled, however, that Barclays had not breached any exclusivity clauses by buying Tricorona.

Barclays has agreed to pay CF Partners 10 million euros ($12.7 million) to settle the case.

"In order to put the matter behind them and bring to a resolution outstanding matters including costs and appeals, CF Partners UK LLP, Barclays Bank plc and Bryggpipan AB i likvidation, formerly known as Tricorona AB, have settled the legal proceedings between them on mutually acceptable terms," the firms said on Thursday in a joint emailed statement.

Under the settlement, all the firms and individuals involved agreed not to comment further.

Hildyard said Harshika Patel, who was Barclays' head of environmental market product and business development at the time of the Tricorona acquisition, had acted as "something of a law unto herself".

He said evidence presented during the trial showed that Patel was "unreliable", exhibited "disingenuous conduct" and "demonstrated a capacity, perhaps a tendency, for manipulative conduct and occasional indifference to propriety".

According to her LinkedIn (LNKD) profile, Patel is now managing director and head of commodities Asia, sales and structuring at JPMorgan Chase.

Attempts to reach her for comment were unsuccessful.

By Michael Szabo and Ben Garside