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The trial of the 'Barclays Four' starts this week — here's what you need to know

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
In the dock: Former Barclays chief executive John Varley leaves Southwark Crown Court in south London on July 17, 2017. Photo: NIKLAS HALLE’N/AFP/Getty Images

A major court case against four former Barclays executives begins in London this week, in what is set to be one of the biggest financial crime cases of the year.

The four ex-Barclays executives, including financial crisis-era CEO John Varley, face fraud charges related to the bank’s emergency funding deal with the Qataris at the height of the financial crisis.

Here’s what you need to know:

What are the charges?

The defendants are facing charges of conspiracy to commit fraud by false representation. The charges relate to Barclays’ emergency fundraising at the height of the financial crisis.

To avoid a government bailout, Barclays raised £11.8bn ($15bn) in 2008 from Qatar Holdings, which is owned by the state of Qatar. Barclays lent £2.3bn to Qatar Holdings under the same deal. It is alleged that the loan was used to fund, either directly or indirectly, the Qatari’s purchase of Barclays’ shares.

The SFO first opened its investigation into the deal in 2012 and brought the charges last year. A separate connected case against Barclays itself was thrown out by UK courts last year. However, the SFO is still pursuing its case against the former bankers who helped to engineer the deal.

Who are the defendants?

Accused: Former Barclays banker Roger Jenkins leaves Westminster Magistrates Court on July 3, 2017 in London, England. Photo: Jack Taylor/Getty Images

Four former Barclays executives face charges. They are:

  1. John Varley: He was CEO of Barclays from 2004 to 2011. The Oxford graduate helped set up Barclays’ investment bank and was the first bank boss to apologise during the financial crisis. He is connected by marriage to the original founders of Barclays.
  2. Roger Jenkins: Once Britain’s highest paid banker, Jenkins held senior roles at Barclays investment bank and was head of investment banking and investment management in the Middle East at the time of the Qatari funding deal. The Scot left Barclays in 2009.
  3. Tom Kalaris: Kalaris was one of the so-called “four musketeers” at Barclays during the Bob Diamond-era when investment banking ruled the roost. The American ran Barclays’ wealth management division but left in 2013.
  4. Richard Boath: Boath spent 15 years with Barclays and was European head of the bank’s institutions group. Described as a “whistleblower” by Financial News, he is pursuing an unfair dismissal claim against Barclays. He left the bank in 2016 and claims he was dismissed after the SFO gave the bank transcripts of interviews it had conducted with Boath related to the Qatari fundraising.

Why is the case significant?

Defending himself: Former Chief Executive of Wealth and Investment Management at Barclays Tom Kalaris leaves Westminster Magistrates Court on July 3, 2017 in London, England. Photo: Jack Taylor/Getty Images

The trial represents the first time senior banking executives have faced criminal charges related to conduct during the 2008 financial crisis. If convicted, the four could face prison sentences of up to 10 years.

It also comes at a time when the SFO is facing criticism for a series of costly, failed prosecutions. Last year, the case against Barclays as a corporate entity collapsed and a case against former Tesco executives related to its £250m accounting blackhole was thrown out by the courts in December.

Lisa Osofsky, a former FBI lawyer, took over as head of the SFO in September. She will want to begin her tenure with a win.

When does the trial start?

The trial begins at Southwark Crown Court in London on January 9. However, the first two weeks will be taken up by legal arguments. The trial properly begin with opening statements on January 21.

How long will it last?

The trial is expected to last 12 to 16 weeks.

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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