Barclays Slapped With £50M Penalty Related To Qatari Fundraising In 2008

Barclays Slapped With £50M Penalty Related To Qatari Fundraising In 2008
  • The Financial Conduct Authority (FCA) will fine Barclays Plc BCS £50 million regarding its failure to disclose certain arrangements agreed with Qatari entities as part of its capital raisings announced in June 2008 and 31 October 2008. 
  • The regulator described the bank's conduct as "reckless" and lacking integrity. 
  • The Upper Tribunal will determine whether to uphold the FCA's decisions against Barclays or not and whether there are any other actions that the FCA should take. 
  • The capital raisings were conducted during the 2008 financial crisis and were subject to intense market and public scrutiny. 
  • Certain Qatari entities were key investors in both capital raisings. At the same time, as part of the basis on which the Qatari entities agreed to participate in the capital raisings, Barclays entered into two advisory agreements involving payments to one of the Qatari entities totaling £322 million over three and five years, respectively.
  • Barclays disclosed that it had entered into an advisory agreement in June 2008 but did not disclose the October agreement and did not disclose the payments under the capital raisings or their connection to the Qatari entities' participation in the capital raisings. 
  • The FCA considers that it would have been highly relevant information to shareholders, investors, and the wider market, especially in October 2008, when the disclosed costs were already perceived to be very expensive.
  • Price Action: BCS shares are down 2.13% at $6.43 during the premarket session on the last check Friday.

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