Barclays Wins Staveley Lawsuit Even as Judge Finds ‘Deceit’
(Bloomberg) -- Barclays Plc won a bitter fight with deal-maker Amanda Staveley over a rescue package she helped engineer at the height of the financial crisis more than a decade ago.
Despite dismissing Staveley’s suit, Judge David Waksman found that the bank seriously deceived her about the terms of the 2008 investment at the center of the case. He also criticized former Barclays executives Roger Jenkins and John Varley.
But Barclays won’t have to pay the 660 million pounds ($918 million) Staveley sought because Waksman found that even if the bank had been honest, Staveley’s PCP Capital Partners wouldn’t have been able to raise enough money to finance the deal.
“I can understand why this outcome will be a serious disappointment to PCP, especially after I have found Barclays to be guilty of serious deceit,” Waksman said in the ruling.
The case hearkened back to the chaos of the financial crisis when Barclays officials fought to stave off a government bailout. At a trial last year that was highlighted by an undercurrent of sexism among former bank officials, Staveley argued that the bank cheated her firm out of millions in potential profits.
After the ruling, Staveley said that the ruling confirms that “a senior executive at Barclays repeatedly lied to me when seeking private investment in the bank during the 2008 financial crisis.”
Her lawyer, Richard East, said he hoped regulators would “have a close look at this judgment and the conclusions the judge reaches on the behavior of senior personnel within Barclays.”
Barclays said in a statement that it welcomed “the court’s decision to dismiss” the claim in its entirety.
The case focused on the treatment of Middle Eastern investors that participated in the fundraising that saved Barclays from a government bailout in 2008. Staveley, who partnered with Abu Dhabi, said the bank lied about the fact that Qatari investors got far better terms.
Her deal would have been significantly more valuable if it weren’t for the misrepresentations made by the bank, her lawyers said.
The rescue deal has haunted Barclays for more than a decade. Some of the key figures at the Staveley trial had been cleared of criminal charges over the Qatari side of the transaction only months before the civil trial was scheduled to start.
The bank is still fighting a potential 50 million-pound fine from U.K. regulators. The Financial Conduct Authority declined to comment except to note that the case is currently before its internal tribunal.
Barclays spent most of last year’s 10-week trial trying to discredit Staveley’s case and her standing in the financial industry. Judge Waksman dismissed the lender’s allegations that she was a lightweight and “chancer.”
Still, the judge said there was no real chance amid the market turmoil of PCP obtaining alternative funding to deliver the 60% debt financing it needed to be able to get 10% interest in the deal it engineered with Abu Dhabi.
He also criticized the “dishonesty” of Jenkins, the bank’s middle-east head during the crisis, who was one of the executives cleared of fraud charges by a London jury last year. Waksman went on to describe Varley, the bank’s former chief executive officer, as being sometimes “evasive” in his evidence.
They trod “almost too carefully” when giving evidence on a pair of advisory service agreements the bank gave to Qatar, the judge said. “One can understand why, since such questions were very serious and went to their own personal integrity.”
The agreements were at the heart of the criminal case, which focused on allegations that Barclays executives hid 322 million pounds paid to Qatar to secure a 4 billion-pound investment in the bank. Varley was also cleared of charges in the case at an earlier stage of the prosecution.
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