Barclays and four former executives were charged by the Serious Fraud Office (SFO) on Tuesday over emergency funds obtained from Qatar in 2008.
Meanwhile, in another potential headache for the bank, City law firm RPC revealed it is “actively reviewing” whether it could lead a shareholder civil claim in relation to the charges.
The SFO charges relate to two fundraisings in 2008, totalling nearly £12bn, which included investments from Qatar Holding and Challenger Universal. The SFO probed “advisory services agreements” struck in 2008, which have resulted in payments of £322m from Barclays to Qatari investors, and a $3bn loan to the State of Qatar that year.
If found guilty, the former employees, who include ex-chief executive John Varley, could face lengthy prison sentences, while Barclays may have to stump up a large fine.
The other executives charged were Roger Jenkins, a former senior investment banker, ex-wealth and investment management division boss Thomas Kalaris and Richard Boath, former European head of the financial institutions group.
“The SFO's case is that Barclays and the individuals charged falsely represented the true position with regard to the terms of the Qataris involvement in the fund raisings. Shareholders who subscribed for shares and suffered losses as a result of any deliberately misleading information or omissions deserve redress,” said Simon Hart, partner at RPC’s banking litigation team.
The seriousness of the SFO action surprised the City, although Barclays shares fell just two per cent, possibly because investors had already factored in the threat of a case.
“The SFO hasn’t pulled any punches,” said Hargreaves Lansdown senior analyst Laith Khalaf. “While RBS and Fred Goodwin recently avoided the ignominy of a court appearance, it appears that Barclays and its former CEO John Varley will not.”
After the SFO announcement, Varley resigned from the board of Rio Tinto, where he was a non-executive director.
Simon Bushell, a partner at Signature Litigation, said: “The decision to charge Barclays shows that the idea that claims arising from the crisis are fizzling out is wide of the mark.
“We know from our own ongoing mandates that there are some very large claims out there which have not yet been brought, and which go right back to the lead up to the crisis.”
Daniel Tarling-Hunter, an analyst at the Economist Intelligence Unit, said: “The step to file criminal charges against top executives is unprecedented and sends a clear message that the SFO is willing to take on the world's largest financial institutions.”
Jonathan Pickworth, a partner at global law firm White and Case, questioned the public interest grounds for the charges. He said: “This will only hurt the current shareholders and today’s hardworking employees.”