Days after Wells Fargo agreed to pay $35 million to settle regulatory claims that its financial advisors pushed clients into risky exchange-traded funds, three former Barclays executives were acquitted of fraud by a London jury after they were accused of paying secret "fees" to Qatar in return for emergency funding during the financial crisis, reported Reuters.
In exchange for rescue financing to avoid nationalization of the bank (which would've meant shareholders take deep losses and executives loses their bonuses), Roger Jenkins, Tom Kalaris and Richard Boath (the three former Barclays executives) paid £322 million ($423 million) in "fees" to the Qatari sheikh who arranged the financing. To ensure that the deal went through, the executives allegedly conspired to hide these payments from their investors, the British government, and the press.
We noted several weeks before the first trial began last January, that after more than a decade since the fall of Lehman Brothers, ushering in the financial crisis, and wrecking the finances of tens of millions of middle-class Americans and citizens of other Western nations, "no bank executives have faced criminal penalties - that is, until very recently."
The three former executives were on the cusp of facing a maximum of 10 years in jail after a 7.5-year investigation by the Serious Fraud Office (SFO) that charged the three in 2017, alleging they paid a "fee" demanded by Qatar in exchange for investing £4 billion ($5.15 billion) in the bank as part of an £11 billion ($14.15 billion) emergency fundraising in 2008. The funding allowed Barclays to avoid nationalization that would've been devastating for shareholder value.
The acquittals of the three executives is another loss for SFO, which failed to win a separate 2018 trial against Barclays for unlawful financial assistance to Qatar in 2008.
The case was historic because it would've meant for the first time in the Western world, a bank executive or executives would stand trial for serious legal consequences - maybe even jail time - for fraud stemming from the financial crisis, it appears banking elites remain untouchable to this day.
As for the next crisis that could be around the corner, it remains to be seen if bankers have the same immunity they did more than a decade ago.