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Anna Johansson
Anna Johansson
Articles (38) 

Trial of Barclays Bankers Set for January 2019

Case is a cautionary tale for investors

September 09, 2017 | About:

Trial Date Set for Barclays Bankers in January 2019

In 2008, John Varley was the CEO and Roger Jenkins was the head of investment banking in the Middle East for Barclays (NYSE:BCS)(LSE:BARC) bank. Tom Kalaris and Richard Boath were also influential heads of the financial institution.

At that time, an investigation was opened on accusations of fraud by false representation concerning an investment made by Qatar’s sovereign wealth fund in June 2008. They raised 4.5 billion pounds ($5.935 billion) from Qatar investors on suspicious activity. There were several high-profile Qatari citizens among the investors, including the Qatari royal family.

The same thing happened the next year, accruing another 7 billion pounds in fundraising capital. Upon further investigation, it became clear that fraudulent activity was at work.

At the same time, the bank entered an “advisory services agreement” with Qatar, a deal worth 322 million pounds. Investigations opened on this detail as well as the charges on their four senior banking officers.

The case proceedings

The four men appeared at Southwark crown court in London because of these suspicions. The case was then transferred to Westminster magistrate’s court, and prosecutors filed criminal charges against them. The trial has been set for January 2019.

It’s expected to last up to four months, and things aren’t looking good for the bankers. But they have excellent lawyers on their side, and they’re fighting it with full vigor.

"As one might expect in the challenging circumstances of 2008, Jenkins sought and received both internal and external legal advice on each and every aspect of the accusations leveled today," said the bankers’ representative Brad Kaufman, chairman of the litigation firm Greenberg Traurig.

These four are the first senior bankers facing criminal charges relating to the incidents from almost a decade ago in the financial crisis. It’s also the first trial of its kind to hit the courts.

They’re being charged with conspiracy to commit fraud by fast representation. Prosecutors are also filing a case against Varley, Jenkins and Barclays for providing unlawful financial assistance via a loan.

The men are on unconditional bail since this is one of the highest profile cases ever brought by the Serious Fraud Office.

Lessons for investors

This extremely high profile case holds some important lessons for the typical investor. These four senior bankers found themselves in a deep hole when they committed unlawful acts, and now they may not be able to dig themselves out.

Whether the bankers are innocent remains to be seen, but they have good lawyers and are working with the system to find the solution. If you ever find yourself facing fraud charges, it’s critical that you have a good criminal defense attorney on retainer to help mitigate the charges.

This experience also teaches about the essentials of avoiding investment fraud. There are dozens of investment fraud types, from inflating a fundraiser to real estate scams. If you’re not careful, you could put money into an investment that goes nowhere.

Sometimes a scam is obvious. It might present itself in broken English, ask for money over the phone or pose as a charity. In other cases, like the Barclays case, it might seem completely legitimate from the outside only to be revealed as a bust later.

To avoid falling prey to a fraudulent experience, apply some of these tactics when approaching an investment of any kind.

  • Be skeptical of any solicitation of an investment, especially if you’re not meeting in person.
  • Avoid investments that claim they’re low risk, no risk or guaranteed.
  • Never invest on the spot, even if they swear the deal will go away.
  • Do your research on every single investment, even if it seems legitimate.
  • Know where your money is going and the kinds of returns you’ll make.
  • Avoid investments from organizations that are currently under investigation by a federal entity.
  • When investing in a company, compare with other companies in the same field to get a sense of its performance.
  • Read the fine print closely; if there is no fine print, run the other way.
  • Ask lots of questions.

Bad investments and scams are all too common, and failing to approach things correctly could put you and your organization in trouble. Watching the market carefully, understanding the implications of a fraudulent investment and protecting your assets are vital steps in mitigating your investment risk.

Disclosure: I do not own the stock mentioned in this article.

About the author:

Anna Johansson
Anna is a freelance writer, researcher, and business consultant. A columnist for Entrepreneur.com, HuffingtonPost.com and more, Anna specializes in entrepreneurship, technology, and social media trends. Follow her on Twitter and LinkedIn.

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