Rotten legacy for Staley
THe prospect of Barclays losing its banking licence over events dating back to an emergency fundraising in 2008 is unimaginable. Barclays traces its Quaker roots back to 1690 and has been part of Britain’s domestic and global landscape since the late 17th century.
Be that as it may, that does not give the bank legal immunity, and for a period before, during and after the financial crisis of 2008-09 Barclays was allowed to free-wheel by its board. What is really disturbing is that it has taken a decade for financial justice to confront alleged wrongdoers.
The Serious Fraud Office has significantly escalated its battle with Barclays and four senior executives. The SFO has now added a charge of unlawful financial assistance to those already lodged.
The latest charge focuses on a $3bn (£2.1bn) loan made at the time of second fundraising in november 2008 which allegedly was tied to a purchase of Barclays shares. Generally speaking, firms lending money to invest in their own shares is frowned upon.
What the case does show is persistence by the director of the Serious Fraud Office, David Green QC, to take on cases against some of the biggest companies in the FTSe 100 irrespective of contribution to the UK economy.
That is why the SFO, both as investigating agency and a prosecutor with special expertise in white collar crime, was established in the first instance.
The current chief executive of Barclays, Jes Staley, like other UK bank bosses, has been working hard to clean up the legacy of the past, with the Qatar fundraising among the most vexatious of issues. It is also slightly curious since the titanic, if contentious, effort of Barclays to look after itself in the crisis saved UK taxpayers a big outlay.
It is not just UK authorities which are on Barclays’ case. The bank still has to settle with the US Justice Department over alleged creation and distribution of securities based on sub-prime mortgages. Sorting this out has been complex because of dysfunction in the Trump administration.
Staley also has local difficulty over his alleged hunt for a whistle-blower, which is being probed by the Financial Conduct authority. It is all a bit like painting the Forth Bridge.
Murdoch challenged
WHen it comes to takeovers, especially one as complicated as the Disney bid for most of the assets of 21st Century Fox, it is never over until the fat lady sings.
In an effort to clear one regulatory hurdle, rupert Murdoch’s Fox has committed to maintain Sky news in Britain for at least five years and establish an independent board to run the channel – addressing concerns that were raised by the Competition & Markets authority.
Whether this will be enough to convince Media Secretary Matt Hancock to give the go ahead is still a little unclear. Ofcom, the guardian of media plurality, never has regarded five years as long enough and would prefer a commitment of a decade.
There will be media watchers who remember the short-lived Murdoch promises of an independent editorial board at The Times in 1981, and how editor Harry evans and the board were quickly substituted with placemen. no long-term harm was done but it demonstrated Murdoch’s capacity to forget undertakings.
In the heady days after the deal between 21st Century Fox and Disney was announced, the potential for another bidder to interrupt the game always seemed possible. Cable giant Comcast is thinking of returning with a higher offer which could turn the heads of investors. Or Comcast could use a new offer as a weapon to extract Sky from the deal, giving it a foothold in production, news and distribution across the UK, Germany and Italy.
rupert Murdoch may not be enjoying his semi-retirement just yet.
Lessons unlearned
INTRIGUED to see that AIG, the insurer at the core of the sub-prime mortgage insurance meltdown, is back in the headlights.
Its Sun america offshoot was among a number of insurers that sold ‘managed volatility funds’ to investors.
The response of AIG and others has been to rapidly rebalance the funds by selling up to $100bn of stock futures, contributing to Wall Street mayhem.
Welcome back to the naughty step.