UK Files Criminal Charges Against Barclays With Fraud Involving Qatari Investors

The United Kingdom’s Serious Fraud Office has charged Barclays (BARC) and four of its ex-executives with criminal fraud involving money used to rescue the bank during the height of the 2008 financial crisis. The government has been investigating the ways in which Barclays sought out Qatari investors to help it stay afloat during that time so that the bank wouldn’t need a bailout. Barclays is also under investigation in the US by the Securities and Exchange Commission and the Department of Justice over payments that Barclays made to Middle Eastern officials.

During two emergency cash calls in 2008, investors put in $15B total, with Barclays stating in filings that it paid £322 million in “advisory services” to them. Shareholders were at first not apprised of this agreement between the bank and Qatari investors. Also, in 2008, Barclays issued a $3B loan facility to Qatar.

In the UK, it is against the law for a company to give money to a party in exchange for the latter’s purchase of company shares. Barclays has denied that the $3B loan was for the purchase of shares by investors. It also has argued that payments it received for advisory services were for actual business purposes. However, the Serious Fraud Office is alleging that the $3B loan to Qatar just weeks after getting funding from investors could be considered a fraudulent capital increase in a scam by Barclays to lend itself funds.

Ex-Barclays Executives Face Criminal Charges
Criminal charges have also been brought in the UK against ex-Barclays CEO John Varley, ex-senior investment bank executive Roger Jenkins, and ex-Barclays executives Thomas Kalaris and Richard Boath. Kalaris used to head up Barclays wealth division. Boath was in charge of its European financial institutions group.

Varley, Jenkins, and Barclays are charged with providing illegal financial help related to the $3B loan. Kalaris and Boath are charged with conspiracy to commit fraud.

Jenkins and Boath have both said that they would fight the criminal charges against them. Meantime, Boath is suing Barclays, claiming that because he served as whistleblower on the Qatar transactions, he was wrongfully terminated.

The UK’s Financial Conduct Authority has already fined Barclays in relation to the Qatar investments. It ordered the bank to pay a $63M penalty over purported disclosure failures. The regulator continues to review the case in the wake of new evidence.

PCP Partners Sues Barclays for Services Rendered in Qatar Investments
Also, PCP Partners is suing Barclays over the “sham payments: made to Qataris, which the private equity group claims placed its own client, the Abu Dhabi sovereign wealth fund, at a financial disadvantage. The fund was among those who contributed to Barclays funding efforts in 2010. Financier Amanda Staveley, who negotiated Abu Dhabi’s investment in Barclays, contends that PCP Partners is owed money for the services it provided to make the deal happen. In her institutional investor fraud case, Stavely is seeking $1.4B.

Securities Fraud Law Firm
At The SSEK Partners Group, our securities fraud law firm represents high net worth individual investors and institutional clients in helping them try to recover losses they sustained due to the fraud, negligence, or mistakes of financial firms, their representatives, or others. Contact one of our institutional investor fraud attorneys today.

SFO charges in Barclays Qatar capital raising case, SFO, June 20, 2017

Amanda Staveley claims Barclays’ $3 billion Qatari investment was ‘dishonest’, Business Insider, September 2, 2016

Barclays faces £50m fine from the FCA watchdog for Qatari deal, BBC, September 13, 2013