The Serious Fraud Office has charged Barclays, its former chief executive and three other former top executives with fraud over the way it raised billions of pounds from Qatar during the financial crisis.
This is the first time any senior bankers have faced charges for events dating to the 2008 crisis. The SFO charged former Barclays chief executive John Varley and three former colleagues – Roger Jenkins, Thomas Kalaris and Richard Boath – with a series of offences after a five-year investigation into the events surrounding the £11.8bn emergency fundraising conducted by the bank during the height of the 2008 financial crisis.
At the time, Barclays raised billions of pounds from Qatar in a move that allowed the bank to avoid taking a taxpayer bailout.
The SFO said the charges related to the two fundraisings the bank embarked on in June and October 2008 and a US$3bn (£2.3bn) loan to Qatar acting through the ministry of economy and finance in November 2008.
“This is the most significant charging decision for the SFO in recent times, if not ever,” said Sarah Wallace, a partner and head of regulatory and criminal investigations at Irwin Mitchell law firm. “In the past few years, Barclays faced an unprecedented number of investigations by worldwide regulators but this SFO criminal prosecution is the most serious.
“In taking on Barclays, one of the largest banks in the world, and its most senior officials who literally were at the very top, sends a very strong message that the SFO is now fearless in terms of the companies and individuals it pursues.”
The four are charged, along with the bank, with conspiracy to commit fraud by false representation in relation to a fundraising in June 2008. Varley, Jenkins and the bank are charged with conspiracy to commit fraud by false representation in relation to the fundraising that took place in October 2008.
Varley, Jenkins and the bank are charged with providing unlawful financial assistance through the loan. The individuals and a bank representative are scheduled to appear at Westminster magistrates court on 3 July.
Barclays said it was considering its position in relation to these developments and awaiting further details of the charges.
Jenkins, who left Barclays in 2009, is based in Malibu, California, and said through his lawyer he would defend himself.
“As one might expect in the challenging circumstances of 2008, Mr Jenkins sought and received both internal and external legal advice on each and every topic covered by the SFO’s accusations,” Brad Kaufman, of Greenberg Traurig, told Reuters.
Varley was chief executive of Barclays until the end of 2010. Kalaris, a London-based US citizen, ran the wealth management arm of Barclays. Boath was former European head of the financial institutions group. They did not immediately comment.
There is a civil case in relation to the events of 2008 brought by Amanda Stavely, an adviser to the UAE’s Sheikh Mansour bin Zayed al-Nahyan, who put more than £3bn into the October 2008 financing. Stavely has brought a civil action claiming fees for her PCP advisory vehicle.
The bank said the charges related to two “advisory services agreements” entered into with Qatar Holding – an investment vehicle for the Gulf state – in June and October 2008.
The bank said on Tuesday the US justice department and Securities and Exchange Commission had also been conducting investigations relating to these agreements and that the City of London regulator, the Financial Conduct Authority, had issued a warning notice into the matter.