Barclays PLC is firing back against the Securities and Exchange Commission's assertion that the transfer of $1.28 billion from Lehman Brothers Holdings Inc. to the U.K. bank may violate U.S. securities laws.

Attempts by the SEC and the trustee charged with unwinding Lehman's brokerage business to now prevent Barclays from keeping funds held in two customer reserve accounts are unwarranted because regulators recognized the risks of the deal and still pleaded with a bankruptcy judge to approve it in September 2008, a Barclays attorney said Tuesday.

"The reason they supported the sale despite those uncertainties was that the sale was better than the only available alternative — a potentially disastrous liquidation … that would have left all customers immeasurably worse off," said Jonathan Schiller, lead Barclays attorney and managing partner at Boies, Schiller & Flexner.

Last week, the SEC said in court papers, that the transfer of cash and securities held in reserve accounts could violate a consumer protection rule because it would leave Lehman with insufficient funds to satisfy the claims of customers whose accounts were not moved to Barclays. The U.K. bank said the regulators' conclusion now stands in sharp contrast to their earlier position.

Barclays has laid claim to the accounts as part of its purchase of Lehman's brokerage business. Lehman and the trustee have sought to wrest back certain assets transferred in that deal.

The SEC declined to comment Tuesday.

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