Justice Dept. sues Barclays over mortgage-backed securities

Markets Associated Press

The Justice Department has sued Barclays Bank PLC and several of its U.S. affiliates over the sale of risky mortgage-backed securities.

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The lawsuit was filed Thursday in federal court in Brooklyn, New York. It seeks to recover civil penalties for fraud from the British bank.

The lawsuit accuses the bank and its employees of misrepresenting the quality of the loans they sold to investors between 2005 and 2007. The Justice Department says investors lost billions of dollars.

Two former Barclays executives are named as individual defendants in the lawsuit.

In a statement, Barclays said it denies the allegations in the lawsuit and says the claims in it "are disconnected from the facts."