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Barclays’ Legal Problems may be Too Many to Handle

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For anyone unfamiliar with Barclays, it’s a British bank and financial services company based out of London. Barclays is also a household name in the financial world, dabbling in retail, wholesale, and investment banking, along with wealth management, mortgages, and credit cards. Basically, Barclays does everything. And now the financial titan is coming under some serious heat for the actions of former executives who are facing fraud charges relating to Qatari investors back in 2008. And while Barclays may only be responsible for a fine from that, there’s a lot more problems for the British bank to deal with

What Exactly Happened to Barclays?

Fraud charges are a serious issue. Which is why the case is being handled by the U.K.’s Serious Fraud Office. That office, which has struggled to prosecute high-profile cases in recent years, is in danger of disappearing, with British Prime Minister Theresa May promising to merge the office into another agency. That means the SFO will come after Barclays with everything they can muster. Not just after the former executives facing criminal charges and jail time, but the bank itself, meaning that a record fine could be on its way.

The charges stem from 2008 when Barclays “raised” $15 billion from Qatari investors to avoid buckling under the recession, including paying $322 million to those same investors for “advisory services” without disclosing the payment. Barclays paid investors to purchase shares, which is explicitly illegal. Barclays, which once denied the allegations, is now “considering its position in relation to these developments.”

As if that wasn’t bad enough, Barclays is also being sued for the same incident — by two different sources. One of the executives under investigation for fraud has brought a lawsuit against the bank for wrongful termination, claiming he was let go because he blew the whistle on the Qatar deal.

Along with that lawsuit, the bank is also being sued for $1 billion by PCP Capital Partners, saying that the Qatari deal amounted to a huge advantage based on fraud, and disadvantaged its own clients. On top of that, the U.S. is also investigating those payments. Barclays has yet to comment on that probe, but is rightfully concerned there.

Lastly, the British bank is also under yet another investigation, this one regarding Barclays CEO Jes Staley directly. He’s being investigated by U.K. regulators for trying to identify a whistleblower at the bank.

Watch the video from Sky News about Barclays Qatar deal:

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Barclays is facing nothing but problems right now. Fortunately, the company has plenty of money lying around to weather the storm. In the long term, Barclays will bounce back. But for now, expect shares of Barclays PLC (BCS) to continue DOWN

Learn about Guy Cohen’s quick look at Tech’s volatility, railroads tracks, and more right here.

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