Barclays has been charged a second time by UK authorities over its 2008 emergency fundraising, raising the stakes for the British bank in its legal battle over the cash injections it arranged from Qatari investors to survive the financial crisis.
The UK’s Serious Fraud Office, which had already brought criminal charges against Barclays’ parent company and four former senior executives, has brought a single charge of unlawful financial assistance against Barclays Bank.
The move causes pressure on Barclay because the latest charge is at the same level of the group’s organizational structure that banking licences and regulatory authorizations are issued. Those are dependent on the financial regulator deeming the company “fit and proper”.
Barclay made a statement,
“Barclays plc and Barclays Bank plc intend to defend the respective charges brought against them. Barclays does not expect there to be an impact on its ability to serve its customers and clients as a consequence of the charge having been brought.”
It is rare for banks to face criminal charges in the UK. Several banks have been found guilty of market manipulation, mis-selling and sanction breaches in the US and none lost their licenses. However, France’s BNP Paribas had part of its licence suspended for a year.
The SFO has been considering the additional action against Barclays Bank since it first charged the parent company and some of its former executives with fraud last June. That may have been an attempt to pressure the bank to settle out of court.
Barclays executives appear determined to fight the charges, however. They may also be hoping that even in the event of a guilty verdict, the consequences for the bank will be limited by the length of time that has elapsed since the events and the extraordinary circumstances of the 2008 financial crisis.
The parent company has already been charged by the SFO with two counts of fraud by false representation and one of unlawful financial assistance over agreements it struck with Qatar at the same time as the Gulf state participated in two fundraisings in June and October 2008.
In addition, the SFO charged John Varley, its former chief executive, with the same counts. He is the first chief executive of a major global bank to be criminally charged as a result of alleged wrongdoing during the crisis.
Roger Jenkins, the then head of the bank’s Middle Eastern business, also faces the same counts. Two other senior bankers at the time, Tom Kalaris and Richard Boath, face a single count of fraud by false representation over the June fundraising.
Barclays faces second charge over Qatar cash injection
