Fraud case against Barclays dismissed; U.S., Canada crack down on ICOs

Receiving Wide Coverage ...

Case dismissed: In a major victory for Barclays, a British court dismissed charges brought by the U.K.’s Serious Fraud Office, which accused the bank of conspiring with former executives to commit fraud and provide “unlawful financial assistance.” The SFO accused the bank of lending $3 billion to Qatar during the financial crisis to fund its own bailout rather than have the British government step in to rescue it.

Jason Alden/Bloomberg

“The decision is a major setback” for the SFO, “which had spent five years probing how Barclays wooed Qatari investors to prop up the bank during the 2008 crisis,” the Wall Street Journal said. However, charges are still pending against four former Barclays senior executives, including former CEO John Varley, and the SFO said it would try to bring the case against the bank to a different court. Wall Street Journal, Financial Times here and here

Raided: As part of a crackdown called “Operation Cryptosweep,” state and provincial regulators in the U.S. and Canada have opened nearly 70 investigations and started or completed 35 enforcement actions against potentially fraudulent initial coin offerings. “The actions announced today are just the tip of the iceberg,” said Joseph Borg, president of the North American Securities Administrators Association, which helped coordinate the raids.

“The probe ratchets up the regulatory pressure on the multibillion-dollar U.S. market for raising funds in cryptocurrencies,” the Wall Street Journal noted. “It follows a series of warnings from the top U.S. securities regulator suggesting that many token sales may be violating securities laws.” Wall Street Journal, Washington Post

Wall Street Journal

Ahead of the pack: While “the two most closely watched stocks in the [online lending] sector have been flops, and other upstarts have backed away from public offerings,” GreenSky “hopes to break the downward trend” when it comes to market with a planned $700 million initial public offering of stock. The sale, which may come to market on Wednesday, would give the online lender a market value of nearly $4.2 billion at the midpoint of its price range, making it “the most valuable U.S. public company specializing in online loans.”

GreenSky said it has facilitated more than $12 billion in loans to consumers for home-improvements and elective medical procedures since its founding in 2006. It said its net income rose 11% last year to $139 million.

Financial Times

Help wanted: European banks are engaged in a “war for talent” for IT and engineering professionals as they compete against big technology forms as well as their rivals in the financial services industry. The number of advertisements for IT and engineering roles at banks in the European Union in the first quarter was 11.4 times higher than in the same period three years ago. The banks are rushing “to fight rising competition and find new sources of growth after years of restructuring.”

Buying and selling: IHS Markit is planning to buy financial services data provider Ipreo from Blackstone and Goldman Sachs for $1.86 billion. Blackstone and Goldman Sachs Merchant Banking bought Ipreo, which provides indexes and data for hard-to-value assets, from KKR for $975 million four years ago. At the same time, IHS said it plans to sell its struggling MarkitServ business, which processes derivatives trades.

New York Times

Rule rollback: “Banks are on the brink of realizing their dream” of softening the Volcker Rule, the Times reports. “The changes, which could be proposed later this month, are emblematic of the larger deregulatory effort underway in Washington,” but carry “particular weight. Watering it down could serve as a valuable example of the Trump administration’s success in rolling back regulations.”

Quotable

"We’re putting ourselves in the shoes of investors. We’re seeing what’s being promoted to investors. And then we’re taking the next step and then we’re finding out whether they’re complying with securities laws." — Joseph Borg, president of NASAA and the director of the Alabama Securities Commission.