Barclays has agreed to pay a £40 million ($50 million) fine to the UK's Financial Conduct Authority (FCA) for failing to properly disclose arrangements with Qatari investors during its emergency fundraising efforts amid the 2008 financial crisis.

Barclays Settles 2008 Qatar Disclosure Case with £40M FCA Fine

The settlement marks the end of a prolonged regulatory battle that began in 2013 when the FCA first issued warning notices against the UK banks, namely Barclays plc and Barclays Bank plc. The fine was reduced from an initially proposed £50 million after Barclays withdrew its appeal to the Upper Tribunal.

The case centered on Barclays' failure to disclose payments totaling £322 million to Qatari entities under two advisory agreements directly tied to their participation in the bank's June and October 2008 capital raisings. These undisclosed payments effectively doubled and tripled the actual costs of Qatari participation in the respective fundraising rounds.

"Barclays' misconduct was serious and meant investors did not have all the information they should have had," said Steve Smart, joint executive director of enforcement and market oversight at the FCA. “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. It is important that listed firms provide investors with the information they need.”

The resolution comes after a separate criminal case against Barclays and its former executives collapsed. Former Barclays Chief Executive Officer John Varley, former Middle East investment banking chairman Roger Jenkins, former executive Thomas Kalaris, former European head of financial institutions Richard Boath, and Barclays itself were facing charges from the Serious Fraud Office (SFO) following a five-year investigation into their roles in this deal.

"Barclays announces that it has agreed with the FCA to withdraw its references to the Upper Tribunal of the Decision Notices regarding Barclays and Barclays Bank PLC concerning the 2008 capital raisings, first published by the FCA on 23 September 2022," the company commented on an official statement.

None of the current Barclays Board members or senior management were involved in the incidents outlined in the FCA's notices. According to the regulator, the latest executive leadership has substantially improved Barclays' systems and controls.

"In view of the time elapsed since the events, Barclays wishes to draw a line under the issues referred to in the Decision Notices and has decided not to contest the Decision Notices further," the company added. "Barclays does not accept the findings of the Decision Notices and this has been acknowledged by the FCA. 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. A provision in respect of the financial penalty imposed by the FCA was taken in 2022 and there is no material financial impact on Barclays."

One of the Largest FCA Settlements Recently

Barclays' settlement and agreement to pay £40 million stands out as one of the most significant FCA cases in recent years. Just two months ago, Finance Magnates reported that the UK regulator imposed a £16.7 million fine on Metro Bank for major deficiencies in its anti-money laundering controls, which left over £51 billion in transactions insufficiently monitored over a four-year period.

Metro Bank's fine could have been £23.8 million, but the bank received a 30% reduction for resolving the matter early. Since then, Metro Bank has implemented new measures to address the identified weaknesses and improve its financial crime controls. Despite the discount, the fine remains one of the largest in 2024, surpassed only by penalties issued to Starling Bank in September (£29 million) and Citigroup in May (£28 million).

“Metro's failings risked a gap being left in our defense against the criminal misuse of our financial system,” commented Therese Chambers, joint executive director of enforcement and market oversight. “Those failings went on for too long.”