UK’s The Financial Conduct Authority (FCA) today announced its decision to fine Barclays for omitting to disclose certain arrangements.
The watchdog slapped a £50 million fine on the financial services provider for not disclosing agreements with Qatari entities as part of its capital raisings announced on 25 June 2008 and 31 October 2008.
The FCA stated:
Barclays’ conduct in the October capital raising was reckless and lacked integrity.
The UK regulator noted that the capital raisings were conducted during the 2008 financial crisis and is subject to intense market and public scrutiny.
Furthermore, the FCA pointed out that Certain Qatari entities were important investors in both of Barclays’s capital raisings at the time. The company entered into two advisory agreements with these entities, involving payments to one of the Qatari entities in the amount of £322 million over three and five years respectively.
Barclays had disclosed that it has entered into an advisory agreement in June 2008 but omitted to divulge the payments or the involvement of the Qatari entities.
The regulator said:
The FCA considers that it would have been highly relevant information to shareholders, investors and the wider market, especially in October 2008, in circumstances where the disclosed costs were already perceived to be very expensive.
Mark Steward, Executive Director of Enforcement and Market Oversight, commented:
At the height of the financial crisis in October 2008, Barclays paid hundreds of millions of pounds in fees to certain Qatari investors so that they would contribute new capital. Barclays did not inform the market and shareholders about these matters as required.
Due transparency is always critical to financial markets, especially in times of market or financial stress. These findings by the FCA will now be considered by the Upper Tribunal.
According to the official announcement Barclays have referred to the Upper Tribunal on FCA’s decision. The Tribunal will decide wheather to uphold FCA’s fine or not.
In the beginning of the year, FCA fined Barclays Bank Plc £783,800 for oversight failings its relationship with Premier FX, a collapsed payment firm. A week earlier FINRA fined Barclays $350,000 for market access controls failures.
