Bank penalised for failing to disclose key details in capital raising deal
The Financial Conduct Authority (FCA) has fined major bank Barclays £40 million for failing to disclose certain arrangements with Qatari entities during its 2008 capital raising.
Barclays withdrew its referral of the FCA’s planned enforcement action to the Upper Tribunal, allowing the regulator to finalise the case. The FCA previously found that Barclays acted recklessly and without integrity during the October 2008 capital raising – a time of significant financial turmoil as banks sought emergency recapitalisation.
The FCA first issued warning notices to Barclays in 2013, but the case was delayed due to criminal proceedings brought by the Serious Fraud Office (SFO). After the SFO case against Barclays was dismissed, the FCA resumed its investigation and published decision notices in October 2022, initially imposing a £50 million fine. Barclays had referred the case to the independent Upper Tribunal but has now opted to end that process.
The regulator emphasised that Barclays’ failure to disclose key information left investors without critical details about the bank’s dealings.
“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,” said Mark Steward, FCA executive director of enforcement and market oversight. “Barclays did not inform the market and shareholders about these matters as required.
“Barclays’ failure to disclose these matters was reckless and lacked integrity and followed an earlier failure to disclose fees paid to Qatari investors in June 2008. There was no legitimate reason or excuse for failing to disclose these matters, certainly no basis for doing so because of the financial crisis. Due transparency is always critical to financial markets, especially in times of market or financial stress.”
Steve Smart, FCA joint executive director of enforcement and market oversight, also pointed out that while the misconduct was serious, Barclays has since transformed its business practices.
“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. It is important that listed firms provide investors with the information they need.”
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