The Financial Conduct Authority has fined Barclays £50mn after branding a fundraising in 2008 as “reckless”.
The bank has been fined for failing to disclose certain arrangements made during the fundraising, in which Barclays asked investors from Qatar and Abu Dhabi for £7.3bn to avoid taxpayer-led bailout.
Barclays undertook two fundraises in June and October 2008, and the fine related to advisory agreements between the bank and Qatari entities which led to £322mn being paid to the Qataris over three and five years.
The FCA said the disclosure of these payments would have had a “material impact” on the terms of the capital raisings and this would have been “highly relevant information” to shareholders.
The disclosure of the payments would have more than doubled the level of payments due to the Qatari entities in connection with their participation in the June capital raising and triple the payments in connection with the October raisings.
“The FCA considers that it would have been highly relevant information to shareholders, investors and the wider market, especially in October 2008, in circumstances where the disclosed costs were already perceived to be very expensive,” the watchdog said.
The FCA initially issued warning notices against Barclays in 2013, saying it intended to fine the bank £50mn, at which point the case was paused pending the outcome of criminal proceedings brought by the serious fraud office.
The SFO’s investigation was later dismissed in court, and the FCA’s case was re-started in 2019.
Mark Steward, executive director of enforcement and market oversight, said: "At the height of the financial crisis in October 2008, Barclays paid hundreds of millions of pounds in fees to certain Qatari investors so that they would contribute new capital.”
Barclays did not inform the market and shareholders about these matters as required.
“Barclays’ failure to disclose these matters [to the market and shareholders] was reckless and lacked integrity and followed an earlier failure to disclose fees paid to Qatari investors in June 2008.”
The findings will now be considered by the upper tribunal.
The investigation was delayed in 2017 after the bank turned over thousands of documents which were found by Simmons & Simmons, the law firm acting for Barclays.
sally.hickey@ft.com
