BCS Barclays PLC

By Max Colchester 

LONDON -- Barclays PLC was charged for a second time by U.K. authorities over a criminal case relating to an emergency fundraising in 2008 from Middle Eastern investors.

The Serious Fraud Office levied charges of unlawful financial assistance against Barclays' operating company Monday, a move that ramps up pressure on the British lender ahead of a landmark trial.

Last summer U.K. authorities charged Barclays over a $3 billion loan it made to Middle Eastern investors as the bank struggled amid the financial crisis in 2008. The British prosecutors had said the funds were then plowed back into Barclays to recapitalize it. Barclays has previously denied the allegations.

Those initial charges were made against the bank's holding company. The new charge is significant as the operating company, Barclays Bank PLC, holds the lender's banking licenses. Regulators must deem the subsidiary to be "fit and proper" to keep those licenses. If found guilty, Barclays could, in theory, be at risk of losing its banking licenses.

In a statement Barclays said it would defend itself against the charges. The bank added that it didn't expect there to be any impact on its "ability to serve" customers. The bank hasn't said whether it would plead guilty or not against the charges.

Other European banks including France's BNP Paribas SA and Credit Suisse Group AG have in the past pleaded guilty to criminal charges without any lasting impact. Credit Suisse's settlement with U.S. authorities for aiding tax evasion didn't result in it losing any licenses. BNP Paribas was banned for a year from dollar clearing after pleading guilty to dealing with sanctioned countries. However, in the U.K. no major bank has recently been found guilty of a criminal charge, so the outcome of such a decision is unclear.

The SFO case has sucked in a cadre of former Barclays' executives who helped structure the deal at the height of the crisis which allowed the British bank to avoid being bailed out by taxpayers. The SFO has spent years probing how Barclays managed to woo Qatari investors to pump funds into the struggling bank. In particular what the purpose was of GBP322 million in "advisory services" that bank paid to Qatari investors.

British prosecutors last summer charged the former chief executive of Barclays with fraud and illegal payments along with three other former executives. It is the first time a chief executive of a major British bank faces criminal charges for actions taken during the financial crisis.

A date for the trial is expected to be set soon.

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

February 12, 2018 06:39 ET (11:39 GMT)

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