Barclays has been hit with a hefty £40 million fine by the Financial Conduct Authority (FCA) for its “reckless” behavior during a capital raising exercise at the height of the financial crisis.
The FCA found that Barclays had failed to disclose important information to investors during two capital raising exercises in June and November 2008. The regulator said that Barclays had breached its obligations to act with due skill, care and diligence, and failed to be open and cooperative with the FCA.
During the financial crisis, Barclays raised a total of £12.8 billion from investors to bolster its capital reserves and avoid a government bailout. However, the FCA found that the bank had failed to disclose the true extent of its financial difficulties and the nature of the agreements it had made with investors.
The FCA said that Barclays had made a number of misleading statements and had failed to provide investors with the information they needed to make informed decisions. This had resulted in investors being misled about the true financial position of the bank and the risks associated with investing in Barclays.
The FCA’s director of enforcement, Mark Steward, said that Barclays had put its financial interests ahead of those of its investors and had failed to act with the necessary care and diligence. He added that the FCA would continue to take action against firms that fail to meet their obligations to investors.
Barclays has since apologized for its actions and said that it had strengthened its controls and processes to prevent a similar situation from occurring in the future. The bank has also agreed to pay compensation to affected investors.
The £40 million fine is a significant blow to Barclays, which has already faced a number of regulatory fines in recent years. The bank has been under increased scrutiny since the financial crisis, and regulators are keen to ensure that banks act responsibly and transparently in their dealings with investors.
Overall, the FCA’s decision to fine Barclays £40 million sends a clear message to the banking industry that reckless behavior will not be tolerated. It is crucial for banks to act with integrity and transparency, especially during times of financial instability, to protect the interests of investors and maintain trust in the financial system.