- Thomson Reuters
- Former Barclays CEO John Varley is among four defendants on trial for fraud allegations linked to 2008’s global financial crisis.
- The trial is set to take four months over charges related to the bank’s emergency refinancing arrangements from investors in Qatar during the crisis.
- It is the first jury trial for a chief executive of a major bank implicated in the crash. There is a possibility of a 10-year prison sentence for the defendants.
A landmark case in London could potentially imprison one of the highest-level banking executives ever charged in relation to the 2008 financial crisis.
Proceedings officially begin on Monday for the trial of Barclays CEO John Varley, who is charged with fraud. The trial, still in its early stages, is part of the UK’s first set of criminal cases pursuing senior bankers for crisis-era events.
The Financial Times reported that Varley is one of four defendants facing charges related to the bank’s arrangements with Middle Eastern investors in the wake of the crisis. In a bid to avoid being part of the British government’s bailout effort – which would have made the bank look weak – Barclays reached out to investors to secure independent financing worth £11.8 billion ($15.5 billion), with £6.1 billion coming from Qatar. Britain’s Serious Fraud Office (SFO) alleges that some £300 million was spent by the bankers to induce the investment from Qatar, which was not fully disclosed to the market or other investors. The four defendants all deny the charges, which carry a 10-year maximum sentence.
After six years and interviews with at least 40 people, the case is heading to trial.
The case is a landmark moment for the SFO, which recently made personnel changes to ensure the flagship case made it to trial after its general counsel quit the watchdog for a law firm.
The SFO previously secured an 11-year prison term for criminal bankers
The stakes are high for the British financial watchdog after two other high-profile SFO cases were thrown out in recent years, including the trial of former Tesco supermarket executives over an alleged accounting scandal, and charges against brokers who allegedly rigged interest rate that banks use to lend with each other, known as Libor.
Similarly, the SFO saw its case against Barclays – separate to the case against the individual ex-bosses – over Qatari fundraising dismissed by a court last year. The SFO later lost an appeal to reinstate those charges.
Still, the SFO has had other wins: British trader Tom Hayes in 2015 became the first to be sentenced to jail for rigging Libor, the institutional lending rate. Other convictions followed. Hayes, who is appealing, is currently serving an 11-year prison sentence.
Though proceedings officially begin Monday for Varley, a jury is not expected to be sworn in until mid-January, with opening arguments not starting until January 21.
The other defendants, the FT said, include Roger Jenkins, Tom Kalaris and Richard Boath, the former European head of the investment bank’s financial institutions group.
Editor’s note: A previous version of this story was corrected to say that Tom Hayes was among a few to be convicted for rigging Libor.