Barclays Hit by New Charge Over 2008 Fundraising -- Update
12 February 2018 - 10:54PM
Dow Jones News
By Max Colchester
LONDON -- Barclays PLC was charged for a second time by U.K.
authorities over a criminal case relating to an emergency
fundraising in 2008 from Middle Eastern investors.
The Serious Fraud Office levied charges of unlawful financial
assistance against Barclays' operating company Monday, a move that
ramps up pressure on the British lender ahead of a landmark
trial.
Last summer U.K. authorities charged Barclays over a $3 billion
loan it made to Middle Eastern investors as the bank struggled amid
the financial crisis in 2008. The British prosecutors had said the
funds were then plowed back into Barclays to recapitalize it.
Barclays has previously denied the allegations.
Those initial charges were made against the bank's holding
company. The new charge is significant as the operating company,
Barclays Bank PLC, holds the lender's banking licenses. Regulators
must deem the subsidiary to be "fit and proper" to keep those
licenses. If found guilty, Barclays could, in theory, be at risk of
losing its banking licenses.
In a statement Barclays said it would defend itself against the
charges. The bank added that it didn't expect there to be any
impact on its "ability to serve" customers. The bank hasn't said
whether it would plead guilty or not against the charges.
Other European banks including France's BNP Paribas SA and
Credit Suisse Group AG have in the past pleaded guilty to criminal
charges without any lasting impact. Credit Suisse's settlement with
U.S. authorities for aiding tax evasion didn't result in it losing
any licenses. BNP Paribas was banned for a year from dollar
clearing after pleading guilty to dealing with sanctioned
countries. However, in the U.K. no major bank has recently been
found guilty of a criminal charge, so the outcome of such a
decision is unclear.
The SFO case has sucked in a cadre of former Barclays'
executives who helped structure the deal at the height of the
crisis which allowed the British bank to avoid being bailed out by
taxpayers. The SFO has spent years probing how Barclays managed to
woo Qatari investors to pump funds into the struggling bank. In
particular what the purpose was of GBP322 million in "advisory
services" that bank paid to Qatari investors.
British prosecutors last summer charged the former chief
executive of Barclays with fraud and illegal payments along with
three other former executives. It is the first time a chief
executive of a major British bank faces criminal charges for
actions taken during the financial crisis.
A date for the trial is expected to be set soon.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
February 12, 2018 06:39 ET (11:39 GMT)
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