Crisis-era fraud charges haunt Barclays as rivals move on

The Serious Fraud Office case against John Varley marks the first time the head of a global bank has faced criminal charges for activities during the crisis, when big lenders across Europe and the USA were being rescued by taxpayers.

Barclays Bank PLC and four individuals including former chief executive John Varley have been charged with conspiracy to commit fraud and the provision of unlawful financial assistance, the Serious Fraud Office said Tuesday.

It also charged Barclays's former senior executives John Varley, Roger Jenkins, Thomas Kalaris and Richard Boath. The case relates to the nature of 322 million pounds ($408 million) in fees Barclays paid to the Qatar Investment Authority and a $3 billion loan facility it made available to the nation as part of side deals to the 12 billion-pound fundraising from Qatari and other investors.

Barclays said it was considering its position.

Barclays turned to Qatar to bolster its finances and avoid a government bailout at the height of the financial crisis. Mr Jenkins' lawyer, Brad Kaufman, said his client would "vigorously defend against these charges".

The bank and the four executives have been accused of false representation while raising the capital.

Deutsche Bank, waylaid for years by mounting litigation costs, has cleared several major legal cases in the past year, including settling charges with the DoJ for mis-selling mortgage securities. Staveley oversaw a 3.5 billion-pound investment in Barclays shares on behalf of Abu Dhabi's Sheikh Mansour bin Zayed Al Nahyan in October 2008.

In addition, Mr Varley and Mr Jenkins have also been charged with the same offence in relation to the October 2008 capital raising and with providing unlawful financial assistance. "I was not a decision-maker and had no control over what the bank did in 2008".

He said in a statement: "The SFO's decision to charge me is based on a false understanding of my role and the facts".

A lawyer for Varley declined to comment, while a lawyer for Kalaris didn't immediately respond to requests for comment.

Roger Jenkins, the former Middle East investment banking head.

The SFO's case involves a cadre a Barclays top executives who steered the bank at the time.

"Whilst broadly expected, we see this as negative for Barclays as it clearly implies that Barclays failed to reach a settlement (speculated at £100-£200m last week) and that the SFO are looking for a higher fine", said Firth.

But the criminal charges, the first to be levied on a bank anywhere in the world for its conduct during the crisis, could lead to fines.

  • Zachary Reyes