The Memo: Barclays receives a £40m fine for "reckless" activity during the '08 financial crisis

It seems that financial institutions are still facing the repercussions of their actions from the global financial crisis. Just last week, Barclays received a £40m fine for “reckless” conduct during a 2008 fundraising drive. The UK’s financial watchdog, the Financial Conduct Authority, has stated that the bank failed to properly disclose its deals with Qatari investors when fundraising during the peak of the crisis. As such, the bank has been criticised for not informing the market or its shareholders accordingly.  

It has been said that Barclays’s behaviour during this fundraising drive, which provided an emergency capital injection, allowed it to recover without government bailout, unlike several of its competitors. The bank is facing intense scrutiny for this decision, as it paid hundreds of millions of pounds in fees to the Qatari investors to coax them into participation. 

This matter has been ongoing for over a decade, with Barclays finally dropping its appeal on 25 November. However, the bank is standing firm that it does not agree with the FCA’s findings but would like to “draw a line under the issues.” 

More broadly, the FCA has been changing its approach to investigations. The regulator has said that, before making an investigation public, it will consider the company’s size and the potential backlash it could face from disclosing claims of misconduct. However, the FCA has also faced pressure from MPs to be more transparent, so the number of publicly disclosed investigations could double.