{"id":94797,"date":"2017-07-03T12:00:55","date_gmt":"2017-07-03T11:00:55","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=94797"},"modified":"2017-07-01T14:23:37","modified_gmt":"2017-07-01T13:23:37","slug":"barclays-plc-charged-with-fraud-by-uk-serious-fraud-office","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2017\/07\/barclays-plc-charged-with-fraud-by-uk-serious-fraud-office\/","title":{"rendered":"Barclays PLC Charged with Fraud by UK Serious Fraud Office"},"content":{"rendered":"

1 Jul 2017 – <\/em>The UK\u2019s Serious Fraud Office (SFO) has charged Barclays PLC with conspiracy to commit fraud and the provision of unlawful financial assistance during the financial crisis in 2008.<\/p>\n

The prosecution has absolutely nothing to do with any of the criminal and reckless banking behaviour that precipitated the crash\u2014their lending practices, the selling of worthless mortgage-backed securities, false valuation and rating of debt instruments, abuse of loan foreclosure procedures, misrepresenting their financial position or any other financial skulduggery.<\/p>\n

Instead, the prosecution relates to Barclays\u2019 rescue.<\/p>\n

While the Royal Bank of Scotland and Lloyds Bank sought refuge in the tender arms of the British government\u2014with billions of pounds seized from the public purse to bail them out\u2014Barclays sought to evade nationalisation and the possibility of any sanctions or restrictions by the UK government on its activities, and instead raised equity from Qatar. It was thus able to meet the higher capital requirements set by regulators as the financial crisis became more acute.<\/p>\n

The fraud charges relate to Barclays\u2019 arrangements for loans totalling \u00a312 billion with Qatar Holding LLC and Challenger Universal Ltd in June and October 2008, and an apparent \u00a33.5 billion \u201cloan\u201d from Qatari and Abu Dhabi investors in November 2008.<\/p>\n

The SFO charges Barclays with failure to properly disclose the so-called \u201cadvisory services agreements\u201d (ASAs) struck in 2008 that involved payments totalling \u00a3322 million over five years to the Qatari investors. Barclays said at the time the fees were for advice. The SFO\u2019s charges imply that Barclays made corrupt payments to secure Qatar\u2019s support for the cash injection.<\/p>\n

The second set of charges of unlawful financial assistance relates to the \u00a33.5 billion \u201cloans.\u201d The SFO is arguing that, contrary to the way Barclays represented the transaction as a loan from Qatar, it had loaned Qatar money, which was then used to buy shares in Barclays as part of the rescue deal. In other words, Barclays was using its own money to buy up its own shares in a circular and illegal operation.<\/p>\n

Unusually, the SFA brought charges against not only Barclays but also its top executives, including John Varley, the chief executive at Barclays between 2004 and 2011. This is the first time that the chief of a global bank has faced criminal charges arising out of the 2008 crash.<\/p>\n

Three others face prosecution: Roger Jenkins, the executive chairman of investment banking and investment management in the Middle East and North Africa, who was paid \u00a340 million a year, Thomas Kalaris, chief executive of Barclays\u2019 wealth and investment management and Richard Boath, European head of financial institutions group.<\/p>\n

Barclays and the four executives have been charged with a conspiracy to commit fraud by false representation in relation to the June 2008 capital raising. Barclays, Varley and Jenkins face the same charges in relation to the October 2008 capital raising. Barclays, Varley and Jenkins have also been charged with unlawful financial assistance. If convicted, they face jail terms of up to 10 years. The first hearing is set for July 3.<\/p>\n

The four men are the most senior UK banking chiefs charged since the financial crisis. While Jenkins\u2019 lawyer said his client would \u201cvigorously defend against these charges,\u201d Boath issued a statement saying he \u201cwas not a decision-maker and had no control over what the bank did in 2008.\u201d Varley and Kalaris have declined to comment. Boath added, \u201cI repeatedly raised concerns about the decisions taken by the bank with both senior management and senior lawyers and was reassured that those decisions were lawful.\u201d<\/p>\n

The SFO also investigated Chris Lucas, the bank\u2019s group finance director, but apparently decided against pressing charges because of his health. It also investigated Bob Diamond, a former CEO, and former senior Barclays\u2019 lawyers–Mark Harding, Judith Shepherd and Matthew Dobson–but again decided not to file charges against them.<\/p>\n

The Financial Conduct Authority (FCA) is also reviewing the Qatar deals, having re-opened its inquiry earlier this year after more documents surfaced. The FCA fined Barclays \u00a350 million in 2013 for failing to disclose some of the fees paid to Qatar Holding, but following Barclays\u2019 appeal, it put the case on hold.<\/p>\n

The Stock Exchange shrugged it off, with shares in Barclays down slightly after the announcement. The announcement was not unexpected, with Barclays acknowledging that it had anticipated that charges would be brought.<\/p>\n

There should be no illusions that there has been some kind of \u201ccultural transformation\u201d among Britain\u2019s regulators. The SFO has not changed its spots and is not in hot pursuit of the banks. The SFO, which the Conservative Party\u2019s election manifesto pledged to fold into the National Crime Agency–emasculating what was an already puny agency–opened its probe in 2012. It has postponed the charging decision at least twice since missing a promised March deadline.<\/p>\n

It is pertinent to consider the fact that Barclays did not immediately protest its innocence. Instead, it issued a statement saying that it was \u201cconsidering its position in relation to these developments.\u201d<\/p>\n

This is because once again, the authorities have acted with kid gloves to protect Barclays from the full impact of a possible criminal conviction, revealing how both the corporate structure and the regulatory system work to safeguard the financial institutions.<\/p>\n

The SFO has charged Barclays PLC, the holding company that owns Barclays Bank, not Barclays Bank, apparently out of concern for the damage a conviction would cause. This could lead Barclays to plead guilty and accept a fine of several hundred million pounds, so as to continue its operations without hindrance, particularly in the US where a criminal conviction would preclude it from operating. Such fines, so much loose change for the banks, have become part of the costs of the banking business and are simply passed on to customers in innumerable charges.<\/p>\n

Pleading guilty presumably means abandoning their former top executives to their fate.<\/p>\n

However, the decision is likely to depend upon whether the SFO also charges Barclays Bank, as well as what the US Department of Justice and US Securities and Exchange Commission decide to do over Barclays\u2019 cash injections from Qatar and Abu Dhabi and its alleged mis-selling of mortgage-backed securities. The SFO told Barclays that it has not made a decision as to whether it will also bring charges against Barclays Bank PLC.<\/p>\n

Furthermore, Barclays faces a \u00a3750 million civil claim for unpaid fees from PCP Capital Partners\u2019 Amanda Staveley and PCP International Finance Limited, which the bank is defending.<\/p>\n

Staveley was the advisor on the purchase of Barclays\u2019 shares on behalf of Abu Dhabi\u2019s Sheikh Mansour bin Zayed Al Nahyan in October 2008. The case, to be heard next January, has already played a crucial role in unravelling Barclays\u2019 version of the share purchase as a loan, making it difficult for the authorities to avoid a prosecution.<\/p>\n

The evidence thus far rebuts any notion that Barclays in 2008 was in any less penurious state than the other banks, which only survived because of the government bailout.<\/p>\n

Furthermore, far from saving the British taxpayer the cost of bailing out Barclays, as some commentators have claimed, Barclays, like all the other banks, has benefited enormously from the \u00a31 trillion provided by the taxpayer, including more than \u00a3500 billion of quantitative easing that has created the biggest government bond bubble in history.<\/p>\n

Barclays, like the other banks, has robbed millions if not billions of people around the world via its criminal fixing of the London Interbank Offered Rate (Libor) and Forex market.<\/p>\n

___________________________________________<\/p>\n

The author also recommends:<\/em><\/p>\n

Two years after the Libor scandal: Banks get token fines for rigging global foreign exchange rates – <\/a>[13 November 2014]<\/em><\/p>\n

Go to Original \u2013 wsws.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

1 Jul 2017 – The UK has charged Barclays with conspiracy to commit fraud and the provision of unlawful financial assistance. But it has nothing to do with the criminal and reckless banking behaviour that precipitated the 2008 crash\u2014their lending practices, the selling of worthless mortgage-backed securities, false valuation and rating of debt instruments, abuse of loan foreclosure procedures, misrepresenting their financial position or any other financial skulduggery.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[],"class_list":["post-94797","post","type-post","status-publish","format-standard","hentry","category-capitalism"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/94797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=94797"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/94797\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=94797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=94797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=94797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}