White collar specialists scramble in landmark prosecution
White-collar crime specialists have scrambled across the City as the Serious Fraud Office (SFO) last month charged Barclays and four former executives with conspiracy to commit fraud, false representation and unlawful financial assistance in arranging a £7.3bn Qatar funding deal at the height of the 2008 financial crisis.
Nearly ten years on, and five years since the SFO began investigating the bank’s fundraising during this period, the charges mark the first criminal prosecution against a UK bank and its former executives.
Former Barclays chief executive John Varley, former senior investment banker Roger Jenkins, former Barclays’ wealth division chief executive Thomas Kalaris, and ex-European financial institutions head Richard Boath were due to appear before Westminster Magistrates Court on 3 July at press time.
Willkie Farr & Gallagher represents Barclays, Greenberg Traurig’s Brad Kaufman and Herbert Smith Freehills represent Jenkins, and Corker Binning represents Varley. Kalaris instructed Steptoe & Johnson and Boath is advised by Peters & Peters’ Michael O’Kane.
Barclays, Varley, Jenkins, Kalaris and Boath are charged with conspiracy to commit fraud by false representation in relation to the June 2008 capital raising under the Fraud Act 2006 and the Criminal Law Act 1977.
Barclays, Varley and Jenkins are also separately charged with conspiracy to commit fraud by false representation in relation to the October 2008 capital raising, and unlawful financial assistance contrary to the Companies Act 1985.
The charges relate to Barclays’ June and October 2008 capital raising arrangements with Qatar Holding and Challenger Universal, and a November 2008 $3bn loan facility it offered the Qatari government.
One City partner told Legal Business that the fact this was the first prosecution of a bank arising from financial crisis manoeuvring was ‘shameful’ for the government. ‘It takes political willpower and resources to bring these cases.’ Apparently ‘there isn’t a huge amount on the government side’.
‘The SFO’s existence is under threat, and it is hugely underfunded. The government does not take the SFO seriously and does not put the right resources into it,’ the partner said.
Claire Shaw of Keystone Law said the SFO was under political pressure. A decade after the crash ‘there is a general feeling we have to have charges’.
The SFO likely delayed to wait for witnesses and documents from abroad to meet the criminal threshold required, she added. In this type of case, ‘you do not want the spotlight of the world [to] shine on you which may cause the case to collapse’.
In a statement Barclays said it ‘was considering its position in relation to these developments, as it awaits further details of the charges’.
georgiana.tudor@legalease.co.uk