Investing.com -- The UK’s financial regulator, the Financial Conduct Authority (FCA), has imposed a £40 million fine on Barclays (LON:BARC) over its handling of disclosures related to a 2008 capital raising deal with Qatari investors.
The FCA's penalty stems from the bank's conduct during a time of severe financial stress when major banks sought emergency recapitalization amid the global financial crisis.
The case dates back to October 2008, when Barclays raised vital capital from Qatari investors to strengthen its financial position.
The FCA found that Barclays' conduct during this process was reckless and lacked integrity, meaning the investors did not receive crucial information they should have had at the time.
This led to concerns about the transparency of the deal and whether the bank had fully disclosed material details to shareholders.
The FCA initially issued warning notices against Barclays in 2013, but the case was paused while the Serious Fraud Office pursued criminal charges against the bank and other parties involved in the transaction.
However, when the SFO's case was dismissed and the other parties were acquitted, the FCA resumed its proceedings. In October 2022, the regulator issued decision notices outlining its case, deciding to impose a £50 million fine on Barclays for the misconduct.
Barclays chose to challenge the FCA’s decision, referring the case to the Upper Tribunal, which is independent of the FCA and reviews appeals in enforcement cases.
However, in a shift, the bank recently decided to withdraw its appeal, acknowledging the seriousness of the allegations but recognizing the changes Barclays has made since the events of 2008.
The FCA has expressed its approval of Barclays’ decision to withdraw the appeal, highlighting that the case underscores the importance of upholding market integrity, especially in complex financial dealings.
“'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 recognise that Barclays is a very different organisation today, having implemented change across the business,” said Steve Smart, the FCA’s enforcement director.