The Serious Fraud Office suffered another humiliating defeat after three Barclays executives walked free from the Old Bailey yesterday.
The bank’s chief deal-maker, Roger Jenkins, 64, and executives Tom Kalaris, 64, and Richard Boath, 61, were all acquitted of committing fraud at the height of the financial crisis in 2008.
The SFO’s case against Barclays itself had already collapsed in 2018, and the bank’s former chief executive, John Varley, 63, walked free over the allegations last year.
The seven-year investigation cost the taxpayer £10 million and leaves the SFO’s reputation in tatters.
Mr Jenkins, Mr Kalaris and Mr Boath were accused of lying about £320 million of secret fees funnelled to Middle Eastern investors.
Prosecutors had claimed the executives were desperate to protect their massive salaries by securing investment to save Barclays from a government bailout.
The lengthy investigation led to the first criminal trial to examine the behaviour of UK bankers during the financial crisis.
Roger Jenkins: The office ‘Big Dog’ who saved the day… and dated The Body
Roger Jenkins was the highest-paid banker in London when the financial crisis hit in 2008.
The deal-maker, nicknamed ‘Big Dog’ at the bank, was an office bruiser – described as ‘a big presence with a big ego’ – who once dated Elle ‘The Body’ Macpherson.
He played the key role in bringing the Qataris to the table, and reaped a £25 million reward for his role, which took his earnings between 2007 and 2008 to £65 million.
Roger Jenkins was the highest-paid banker in London when the financial crisis hit in 2008. The deal-maker, nicknamed ‘Big Dog’ at the bank, was an office bruiser – described as ‘a big presence with a big ego’ – who once dated Elle ‘The Body’ Macpherson (pictured together in 2012)
Scottish-born, Mr Jenkins represented his country in the 400m at the 1974 Commonwealth Games. After studying economics at Heriot-Watt University, he joined Barclays as a graduate trainee.
His brother David, a former golden boy of British athletics, was jailed in America for smuggling £54 million of steroids across the Mexican border.
Away from the bank, Roger Jenkins mixed with the rich and famous. Many of these connections he owed to his second wife, Sanela Dijana Catic, a beautiful Bosnian refugee 16 years his junior, who he met in a City gym.
In 1999, Miss Catic became Mrs Diana Jenkins and the couple became a fixture on London’s A-List philanthropic social scene. Friends included Mick Jagger, fashion designer Stella McCartney and former model Cindy Crawford.
He once hosted a soiree to raise £10 million for Darfur refugees. Among the guests were Matt Damon, Sir Michael Caine, Bono and Scarlett Johansson.
Mr Jenkins played the key role in bringing the Qataris to the table, and reaped a £25 million reward for his role, which took his earnings between 2007 and 2008 to £65 million. He is pictured with Venezuelan model Aida Yespica in 2014
Crucially his wife’s connections also included the Qatari royal family, most notably Sheikh Hamad, Qatar Holding’s chairman.
Mr Jenkins had already made his name at Barclays conducting a legal but controversial tax avoidance division, making an estimated £120 million in his first three years. But he went on to head the investment banking division in the Middle East, where he was the ‘rainmaker’ for the deal to save the bank.
His wife was said to have made contact first with the sheikh’s wife.
What followed were weeks of fraught negotiations which led one senior Barclays banker to observe: ‘They’ve got us by the balls’.
Rallying his troops, Mr Jenkins branded colleagues ‘pathetic’ and called for ‘tough leadership’, saying: ‘God, no wonder people can’t do deals. There comes a time where you’ve just got to shoot.’
As soon as the initial deal was agreed with the Qataris, the back-slapping began. On June 26, 2008, the bank’s chief executive emailed Mr Jenkins and said: ‘We could not have done what we have done without the pivotal role you played. Thank you for the extraordinary skill and tenacity that you have brought to (the) project.’
But within a year of the deal being signed, Mr Jenkins left the bank and split from his wife. The couple divorced in 2012, with Mrs Jenkins reportedly receiving £150 million.
Mr Jenkins went on to marry Larissa Andrade, a Brazilian actress 29 years his junior, in a ceremony conducted by a ‘wellbeing practitioner’ in Brazil. The couple live in Malibu, California.
Yesterday Mr Boath’s lawyer called for the Attorney General to launch an investigation into the SFO’s blunders and ‘repeated poor judgment’.
Mr Boath added: ‘The case was a complete invention of the part of the SFO and they should never have brought it. It’s been tough but I’m thrilled.’
Mr Jenkins said: ‘I am conscious that the SFO plays an important role in the ethical functioning of our capital markets, however it is equally important that they are properly resourced to act fairly and expeditiously. This has taken an enormous toll on me both economically and personally.’
The case revealed the panic in the Barclays boardroom amid the market turmoil that put the bank’s future at risk. Executives were desperate to avoid a bailout and, the SFO claimed, sought to protect their salaries and ‘very large bonuses’.
Tom Kalaris: Jail? The food’s awful and the sex is worse
Tom Kalaris was known as the ‘quarterback’, who had the job of positioning Barclays executives as they tried to land the rescue deal as the financial crisis raged.
The Wall Street veteran, a British-American citizen, had gone to university in Chicago before joining Barclays in 1996, rising to chief executive of wealth and investment management.
As the right-hand man to Bob Diamond, who resigned in disgrace in 2012 over the LIBOR scandal, Mr Kalaris received £20.7 million over two years.
Tom Kalaris (pictured yesterday) was known as the ‘quarterback’, who had the job of positioning Barclays executives as they tried to land the rescue deal as the financial crisis raged
Audio tapes played to the court revealed that the 64-year-old had raised the alarm over the fees being paid to the Qataris.
He told Richard Boath that he did not want anyone from the bank to go to jail over the deal because ‘the food sucks and the sex is worse’.
He added later: ‘This is one of these things where you know, if you go down, the whole place goes down with you, right?’
His life was disrupted by the seven-year SFO inquiry. He co-founded Saranac Partners, a wealth management company, but stepped down from the management in 2016 as the investigation continued.
To keep the bank afloat, the bosses agreed to pay an extra £322 million in fees to Qatari investors – brought in by financier Amanda Staveley – in exchange for £4 billion of investment.
The funding helped Barclays avoid a public bailout that would have put it under government control.
Prosecutors argued that these secret fees, close to double what other investors received, should have been made public.
But the bank maintained they were actually for advisory services in the Middle East, and separate from the fundraising deal.
The failure of the trial is the latest in a string of botched SFO investigations. In 2018, a case against top Tesco executives collapsed, leaving taxpayers with a £6 million bill.
And last year the SFO ditched long-running investigations into Rolls-Royce and pharmaceutical giant GlaxoSmithKline.
Richard Boath: The ‘bag boy’ who dreamed of fleeing to Brazil
As the European head of financial institutions at Barclays, Richard Boath helped banks and insurance companies raise money on capital markets.
But in the height of the 2008 panic, he was enlisted as the ‘bag boy’ for ‘Big Dog’ – the nickname given to Roger Jenkins.
‘I’ve been asked to help document the latest handshake,’ the 61-year-old said in one call, adding in interviews with the SFO: ‘I was the poor person that had been told by Roger to “get it sorted”. You don’t generally tell Roger to “f*** off”.’
As the European head of financial institutions at Barclays, Richard Boath (above) helped banks and insurance companies raise money on capital markets. But in the height of the 2008 panic, he was enlisted as the ‘bag boy’ for ‘Big Dog’ – the nickname given to Roger Jenkins
Phone calls between Mr Boath, the son of a chemicals company executive and a former Miss Manchester, and other colleagues were played in court. ‘What he doesn’t realise is that if he doesn’t come through with his money, we’re f*****,’ he said of a Qatari negotiator.
Mr Boath, who lives in Henley-on-Thames, also told the bank’s top lawyer: ‘My worry is every journalist just gets it and says this is, you know… it begins with a b’ – meaning ‘bung’ or corrupt payment.
He added that he would never be interviewed by the SFO because ‘I’ve got a house in Brazil, there’s no extradition treaty, I’m off.’
The Barclays case has also led to anger because the former SFO director who pursued the case, Sir David Green QC, was knighted for services to the criminal justice system in December 2018.
Critics blamed the cost and length of the proceedings on an alleged anti-banker agenda led by Sir David. A source said: ‘The case became very personal for Sir David Green. There was a proper outcry after the crisis and a “let’s nail a banker” mentality and I suspect that he drove this case along.’
The financial crisis hit the UK in September 2007 when there was a run on Northern Rock and the Government was forced to nationalise the bank. The money Barclays raised in 2008 saved it from a bailout, but RBS, HBOS, Northern Rock and Lloyds all had to be rescued as part of then prime minister Gordon Brown’s £500 billion package, amid fears the whole financial infrastructure would collapse.
The SFO launched its investigation into Barclays in August 2012, but it took until June 2017 to charge Mr Varley, Mr Jenkins, Mr Kalaris and Mr Boath with fraud.
Seven months later criminal proceedings were initiated against the bank itself, but these were thrown out by a judge in May 2018.
The first trial against the four bankers started in January 2019, but the case against Mr Varley was thrown out due to a lack of evidence.
The remaining three returned to court on October 8 last year for a second trial.
Ross Dixon, a partner at Hickman & Rose solicitors, said: ‘The SFO’s failure to secure any convictions in this important and high profile case raises serious questions about the agency’s treatment of individuals in these matters.’
The SFO said: ‘Our prosecution decisions are always based on the evidence that is available, and we are determined to bring perpetrators of serious financial crime to justice. Wherever our evidential and public interest tests are met, we will always endeavour to bring this before a court.’
Barclays covered the four men’s legal costs, which are said to have exceeded £40 million.
Barclays declined to comment last night.
Prince Andrew’s ex who is suing Barclays for £1.5billion
Amanda Staveley is the high-flying financier who brought in investors from the Middle East to save Barclays from a government bailout in 2008.
With the Serious Fraud Office trial over, the 46-year-old Cambridge University graduate, who once dated Prince Andrew, will now sue Barclays for £1.5 billion for unfair treatment.
The case is due to start later this year and it is believed further damaging revelations will emerge about the culture at the bank at the time.
Amanda Staveley (above) is the high-flying financier who brought in investors from the Middle East to save Barclays from a government bailout in 2008. With the Serious Fraud Office trial over, the 46-year-old Cambridge University graduate, who once dated Prince Andrew, will now sue Barclays for £1.5 billion for unfair treatment
One insider told the Mail that senior Barclays employees were ‘openly sexist about Amanda and rude towards their investors. There’s more to come out’.
Mrs Staveley has made her millions by acting as a banker to the Middle East’s oil-rich sheikhs.
Her family’s wealth dates back to the 16th century when Henry VIII’s one-time favourite, Cardinal Wolsey, granted them a plot of land in North Yorkshire.
Her father Robert is a wealthy landowner while mother Lynne is a former champion horsewoman.
In 2008, Mrs Staveley brokered the £210 million sale of Manchester City FC to Abu Dhabi’s Sheikh Mansour.
At the same time she was eyeing up opportunities to invest in a British bank, and arranged for the sheikh to come in alongside the Qataris at Barclays.
She now alleges she was denied huge fees for arranging the investment because of Barclays’ underhand tactics. The civil case was delayed by the criminal trial, but is expected to go ahead this year.
Barclays is defending her claim.