In the history of the United Kingdom, it is the very first time that senior banking executives have been charged guilty of engaging in conspiracy to commit fraud during the 2008 financial crisis. The case against the Barclays executives was filed in by the Serious Fraud Office against a EUR11.8-billion rescue. The first ever UK banking criminal trial began on 23 January, Wednesday and the proceedings are expected to last for about four to six months.
In 2008, Barclays, the British multinational investment bank and financial services company headquartered in London, escaped a UK bailout by rising funds from Middle Eastern investors to avoid insolvency and continue operations. The bank as it reports did not have enough capital raised from the existing shareholders and needed a solid resort to mitigate further consequences. The gulf-state of Qatar had then come to their rescue when the global banking crisis were potentially turning into a full-fledged depression. While other banks sought government funding to survive the credit crunch, Barclays apparently did not want to fall under government control and scrutiny.
Four senior employees have been prosecuted and charged guilty- John Varley, the bank's former boss; investment banking executive Roger Jenkins; Thomas Kalaris, head of the bank's wealth management business; and Richard Boath, former European Head of Financial Institutions Group at the lender's investment bank. These executives reportedly paid secret illegal commissions to the Qataris thus misleading the investors and hiding this information.
The Serious Fraud Office took about six years to get to this point after several investigations and a jury at Southwark Crown Court will hear the opening arguments of the Serious Fraud Office against John Varley and his three fellow executives.
Meanwhile, the UK government has announced plans to launch a new Economic Crime Strategic Board, a collaboration between the government and leading banks including Barclays, Santander, and Lloyds. The initiative is driven by the need to tackle corruption, bribery, fraud and dirty money and identify the defaulters who are progressing at the expense of law-abiding citizens.
Every year, economic crimes like money laundering, terrorist financing, unexplained wealth orders etc amount to GBP14.4 billion across the United Kingdom. The National Crime Agency (NCA) has also recorded several fraudulent activities reports in FY2017-18, indicating a year on year rise of 10%. A dire need to look carefully into the matter and formulate an effective course of action was realised by the concerned authorities.
Since London has been one of the flourishing financial hubs, it is only highly likely to witness such activities. Thus, the government is teaming up with specialists across the public and private sector in the economy to discuss and deploy the best of combined expertise and put continuous innovative efforts to maintain UK’s status as a secure global financial centre. Also, at the backdrop of the Brexit scenario, it is only helpful to shield the economy and promote transparency to sustain what’s to come.
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