The UK’s financial regulator imposed a penalty after Barclays failed to disclose key agreements with Qatari investors during a 2008 fundraising drive that allowed the bank to avoid a government bailout.

Barclays has been handed a £40 million fine by the UK’s Financial Conduct Authority (FCA) over its conduct during a fundraising effort in 2008. The penalty follows accusations that the bank acted recklessly and lacked integrity when it raised money during the financial crisis, failing to disclose crucial information about its dealings with Qatari investors.

The FCA’s investigation revealed that Barclays had made undisclosed payments to certain Qatari entities to secure their investment during a critical time for the banking sector. The bank sought billions of pounds from sovereign wealth funds, including those from China, Japan, Singapore, and the Middle East, but specifically, the payments to Qatari investors were not made public, as required by regulatory rules.

This fundraising drive was pivotal in Barclays’ efforts to stay afloat during the global financial collapse triggered by the fall of Lehman Brothers in 2008. At the time, other major banks like Royal Bank of Scotland and Lloyds had to be rescued by the UK government. However, Barclays avoided this fate through its own fundraising strategy, which the FCA later found to have been shrouded in secrecy.

In particular, the FCA noted that Barclays paid hundreds of millions of pounds in fees to Qatari investors to ensure their participation in the fundraising. One of the most significant payments included around £322 million in fees to a Qatari entity, which were described as “advisory services” in a series of side agreements. The Serious Fraud Office had also investigated the undisclosed fees, suggesting that they were extra charges imposed by the Qataris. However, criminal charges were later dropped, and three former Barclays executives were acquitted in 2022 after becoming the first bankers to face a jury over the 2008 financial crisis.

Despite the findings, Barclays decided to withdraw its appeal against the FCA’s ruling, opting to “draw a line” under the matter. The bank’s spokesperson made it clear that while it did not agree with the conclusions of the investigation, it believed that moving forward without further legal challenges was in the best interests of its stakeholders. “Barclays does not accept the findings of the decision notices, and this has been acknowledged by the FCA,” the spokesperson stated.

The FCA’s original fine had been set at £50 million but was reduced to £40 million after further consideration. Steve Smart, the FCA’s joint executive director for enforcement and market oversight, remarked that Barclays’ actions were “serious” as they prevented investors from receiving critical information at the time. However, he also acknowledged that the events occurred more than 16 years ago and recognised that Barclays has since undergone significant changes. “Barclays is a very different organisation today, having implemented change across the business,” Smart added.

While the FCA’s investigation focused on Barclays’ failure to disclose the full extent of its payments to Qatari investors, the penalty also serves as a reminder of the importance of transparency for publicly listed companies. The FCA has underscored that investors must be provided with accurate and complete information to make informed decisions.

Barclays, now a leading global bank, has worked to overhaul its business practices since the crisis. The bank has faced several legal and regulatory challenges over the years, but it has made significant strides in its governance and internal controls. The fine marks the final chapter in a long-running investigation, and Barclays is keen to move on from this troubled period in its history.

As the bank looks to put the past behind it, the £40 million fine serves as a cautionary tale for other financial institutions about the importance of maintaining integrity and transparency during high-stakes fundraising efforts, particularly in times of financial instability.