Posted: December 14th, 2017
In previous updates, DE-Tenants.org explained how the Qatar Investment Authority and the former Qatari Prime Minister bailed out Barclays investment bank in the midst of the 2008 financial crisis. Barclays’ £11.8 billion emergency cash-raising efforts have led to criminal charges and regulatory penalties, along with a whistleblowing claim from one of its most senior bankers and a $1 billion lawsuit filed by a financier with Persian Gulf connections.
Today we will discuss ongoing investigations by the US Department of Justice and the Securities and Exchange Commission.
Investigation: Department of Justice and Securities and Exchange Commission
Britain’s white-collar law enforcement agency, the Serious Fraud Office (SFO), announced criminal charges against Barclays and four former employees in June 2017. The charges included conspiracy to commit fraud and unlawful financial assistance. However, SFO investigators have previously noted that Qatar’s former prime minister Sheikh Hamad bin Jassim bin Jaber al-Thani (HBJ) and the Qatar Investment Authority (QIA) were not suspected of wrongdoing and were not the investigators’ focus.
But the SFO is not the only government criminal investigator to scrutinize Barclays’ £11.8 billion emergency cash-raising efforts and the £322 million advisory services agreements (ASA) associated with the bailout. In the United States, investigations by the Department of Justice and Securities and Exchange Commission are ongoing, according to Barclays 2016 Annual Report.
The Wall Street Journal (among others) has reported that the investigations date back to 2012 and seek to determine whether the ASA payments by Barclays are compliant with the U.S. Foreign Corrupt Practices Act (FCPA).
The FCPA is most well-known for its anti-bribery provisions which prohibits American corporations and securities issuers from paying foreign government officials to assist in obtaining or retaining business. And Barclays has disclosed in a 2012 stock filing that, indeed, the DOJ and SEC are interested in suspected bribery of foreign officials. The stock filing reported:
On 31 October 2012, the Issuer [Barclays Bank PLC] announced that it had been informed by the Department of Justice […] and the SEC that they are undertaking an investigation into whether the Group’s relationships with third parties who assist the Group to win or retain business are compliant with the United States Foreign Corrupt Practices Act. The Issuer is investigating and fully co-operating with the DOJ and SEC.
Barclays 2016 Annual Report confirms that the DOJ and SEC’s FCPA investigation for possibly bribing foreign officials has to do with the £322 million advisory services agreements.
Part 5 of this series will look at ongoing litigation brought by PCP Capital Partners against Barclays.
- Barclays Series (Part 1): Qatari Deal with Barclays Leads to Penalties & Criminal Charges
- Barclays Series (Part 2): Barclays Fined by UK’s Financial Conduct Authority
- Barclays Series (Part 3): UK’s Serious Fraud Office Announces Criminal Charges Against Barclays & Former Employees
- Barclays Series (Part 4): Barclays Investigated by Americans Under Foreign Corrupt Practices Act
- Barclays Series (Part 5): Barclays Sued by PCP Capital Partners in a $1 Billion Lawsuit
- Barclays Series (Part 6): Barclays Employee Files Whistleblower Claim
- Barclays Series (Part 7): Barclays Breaks Finance Due Diligence Rules for Qatari Prime Minister