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Barclays has dropped an appeal against a fine levied by the UK’s financial watchdog over payments to Qatari investors linked to an emergency capital injection in 2008.
The Financial Conduct Authority said on Monday it had imposed a £40mn fine for conduct that was “reckless and lacked integrity” after Barclays abandoned its legal challenge.
The FCA said Barclays breached the UK’s listing rules by failing to disclose £322mn that it agreed to pay for “advisory services” to Qatar Holding at the same time as it accepted up to £4.6bn in capital from the state-backed investment group and a second Qatari vehicle.
By omitting the details of the arrangement, the FCA said, Barclays misled the market about the costs associated with an overall £11.8bn emergency capital raising that it held to stave off a government bailout.
Barclays had been due to appeal against the FCA fine at London’s upper tribunal in a court case starting on Monday, in which the bank’s former chief executive John Varley was set to appear as a key witness.
But the bank abandoned the appeal, saying it wanted to “draw a line under the issues” even though it “does not accept the findings” of the FCA.
The move closes one of the final episodes in a legal saga that has swung back and forth for more than a decade, leaving the reputations of one of Britain’s biggest banks and the country’s main financial watchdogs in the balance.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “Barclays’ misconduct was serious and meant investors did not have all the information they should have had.”
But Smart added that “the events took place over 16 years ago and we recognise that Barclays is a very different organisation today, having implemented change across the business”. The watchdog reduced its fine from the £50mn it initially announced in 2022.
The controversy over the actions taken by Barclays has prompted criminal and regulatory investigations and two failed prosecutions.
Varley became the first chief executive of a large bank to face a jury over events during the financial crisis but was ultimately acquitted, and charges against Barclays itself were dropped before trial. The case helped prompt an overhaul of corporate criminal liability in the UK.
Former bankers Roger Jenkins, Thomas Kalaris and Richard Boath were also acquitted of criminal charges in 2020.
