U.K. banking giant, Barclays plc, dropped its appeal of an enforcement case brought against it by the Financial Conduct Authority (FCA) for allegedly failing to disclose the details of its efforts to raise capital from investors in Qatar during the financial crisis.
Back in 2022, the FCA sought to impose a £50 million fine on Barclays after finding that the bank was allegedly reckless in its disclosure to investors regarding an arrangement to raise capital from Qatari investors in mid-2008, at the height of the financial crisis. The deal purportedly involved the bank agreeing to pay £322 million to the Qataris for future advisory services.
“These payments were calculated specifically by reference to the Qataris’ financial demands for investing in the capital raisings, not the value of the advisory services that Barclays expected to receive under the agreements,” the FCA alleged. And, it said that the details of these arrangements weren’t properly disclosed to shareholders.
Barclays initially sought an appeal of the FCA’s decision, referring the case to the Upper Tribunal. Today, the bank announced that it has withdrawn that appeal.
“In view of the time elapsed since the events, Barclays wishes to draw a line under the issues referred to in the [FCA’s] decision notices and has decided not to contest the decision notices further,” it said in a statement.
“Barclays does not accept the findings of the decision notices and this has been acknowledged by the FCA,” it said. “Notwithstanding the difference of view, Barclays has concluded that the interests of the bank, its shareholders and other stakeholders are best served by withdrawing the references,” it added..
As a result of the appeal being dropped, the FCA said it has now fined Barclays £40 million.
“The events in 2008 were of national importance as banks sought emergency recapitalization. The FCA has a primary objective to ensure market integrity. Banks should treat their obligations to the market and shareholders seriously,” the FCA said.
The bank said that it planned for the financial penalty that was originally imposed by the FCA in 2022, and that the fine will have no material financial impact.
“Barclays’ misconduct was serious and meant investors did not have all the information they should have had. However, the events took place over 16 years ago and we recognize that Barclays is a very different organization today, having implemented change across the business,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA, in a release.
“It is important that listed firms provide investors with the information they need,” he added.