Jun 20, 2017

What is the Barclays fraud case about?

What is the case about?The Serious Fraud Office is accusing the bank and four of its former senior staff of lying, or not fully disclosing to the market what it was paying Qatari investors as they were ploughing billions of pounds into Barclays to stave off a UK taxpayer bailout. The £2.4bn in total that was pledged to Qatar matched what the tiny Gulf State initially invested in Barclays, leading to questions over whether what was going on was inducement, or lending to reinvest back in the bank. Lehman Brothers' historic collapse had roiled markets, and the UK Treasury held a series of emergency meetings on whether to bail out four banks, including Barclays. Credit Suisse reached a similar agreement with Qatar also in October 2008 as the Swiss bank undertook its own SFr10bn capital raising, but unlike Barclays, disclosed the loan that had been approved by Swiss regulators. The concern is that if a bank lends money to a cornerstone investor at the same time as a fundraising then it could potentially be perceived as secret financial assistance through propping up the company's share-price, as happened in the famous Guinness share-trading fraud in the 1980s.

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