Barclays’ delay on mining certificate cost me £10,628
T.M. writes: In 2016, I held shares in mining company Amari through Barclays Stockbrokers. Amari was bought by Australian company Perseus Mining on terms that included giving me warrants exercisable at 44 cents. For two years I pressed Barclays for my warrant certificate, to no avail. In 2018, Perseus shares rose to 50 cents, meaning I could buy at 44 cents and immediately sell at 50 cents, but I could not as Barclays had still not produced the warrant certificate. ANYONE who has ever held warrants will know the feeling of waiting and hoping, watching the share price rise until it is above the exercise price and you can turn your warrants into shares and then sell them at an instant guaranteed profit.
Barclays Stockbrokers deprived you of that profit. By the time the brokers came up with the necessary warrant certificate last December, the Perseus share price had slipped back to 44 cents and your paper profit had evaporated.
You then complained to the Financial Ombudsman Service. The Ombudsman appointed an investigator who heard from both sides and ruled: ‘I am satisfied there is enough evidence to show that Mr M clearly wanted to exercise these warrants in April 2018 for 44 cents and sell them for the price they were trading at then, of 50 cents.’
Barclays accepted this, but hit back that you could have waited until March of this year, when Perseus shares very briefly touched 54 cents, giving you an even bigger potential profit.
The investigator rejected this argument, saying: ‘I do not think it is fair to expect Mr M to be checking the share price constantly and to be ready to act on his warrants the second the price gets to above 50 cents.’
The blunt fact was that the brokers took a very long time to give you the warrant certificate that would allow you to trade, and the Ombudsman’s investigator ruled that a fair outcome would be for Barclays to pay you the profit you would have made in April last year, which was £10,628.
But then the brokers objected. They asked for a fresh review of all the documents in the case, putting you back to square one. ‘Am I flogging a dead horse?’ you asked me.
I put the same question to Barclays Stockbrokers – now operating under the new name Smart Investor. This led the brokers themselves to review all their documents, and they made a startling discovery.
They had thought that you asked to turn your warrants into shares in March 2018, just before the Perseus shares rose to 50 cents in April.
They have now found that your request came much earlier, so you would clearly have had time to complete the paperwork and pocket the profit.
The brokers told me: ‘We accept that we did not provide the information that our customer requested in a timely manner, which ultimately delayed Mr M’s ability to exercise the warrants. We have apologised to Mr M and offered him £10,628 to ensure he is not left out of pocket as a result of the delays.’
You have told me that the payment has arrived. An excellent outcome.