Barclays 2014 Annual Report Download - page 310

308 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Notes to the financial statements
Accruals, provisions, contingent liabilities and legal proceedings
29 Legal, competition and regulatory matters continued
BBPLC also agreed to cooperate with the DOJ and other government authorities in the US in connection with any investigation or prosecution
arising out of the conduct described in the NPA, which commitment shall remain in force until all such investigations and prosecutions are
concluded. BBPLC also continues to cooperate with the other ongoing investigations.
In anticipation of the expiry of the two-year period, in June 2014 Barclays and DOJ-FS entered into a letter agreement which: (i) gives DOJ-FS until
27 June 2015 to make a determination under the NPA solely as to whether any of Barclays trading activities in the Foreign Exchange market during
the two-year period from 26 June 2012 constituted the commission of a ‘United States crime’; and (ii) with respect to the ongoing investigation of
those trading activities by DOJ-FS and DOJ-AD, extends Barclays’ obligation to disclose non-privileged information in response to enquiries of the
DOJ-FS to 27 June 2015. The two-year period under the NPA has otherwise expired.
Investigations by the US State Attorneys General
Following the settlements announced in June 2012, 31 US State Attorneys General commenced their own investigations into LIBOR, EURIBOR and
the Tokyo Interbank Offered Rate. The NYAG, on behalf of this coalition of Attorneys General, issued a subpoena in July 2012 to BBPLC (and
subpoenas to a number of other banks) to produce wide-ranging information and has since issued additional information requests to BBPLC for
both documents and transactional data. BBPLC is responding to these requests on a rolling basis.
Investigation by the SFO
In addition, following the settlements announced in June 2012, the SFO announced in July 2012 that it had decided to investigate the LIBOR matter,
in respect of which BBPLC has received and continues to respond to requests for information.
Investigations by the European Commission
The Commission has also been conducting investigations into the manipulation of, amongst other things, EURIBOR. On 4 December 2013, the
Commission announced that it had reached a settlement with the Group and a number of other banks in relation to anti-competitive conduct
concerning EURIBOR. The Group had voluntarily reported the EURIBOR conduct to the Commission and cooperated fully with the Commission’s
investigation. In recognition of this cooperation, the Group was granted full immunity from the financial penalties that would otherwise have
applied.
ISDAfix Investigation
Regulators and law enforcement agencies, including the CFTC and the DOJ, are also conducting separate investigations into historical practices
with respect to ISDAfix, amongst other benchmarks. BBPLC has received and continues to respond to subpoenas and requests for information
from various authorities including the CFTC and the DOJ.
Precious Metals Investigation
BBPLC has been providing information to the DOJ in connection with the DOJ’s investigation into precious metals and precious metals-based
financial instruments.
Foreign Exchange Trading Investigation
Various regulatory and enforcement authorities, including the FCA, the Commission, the CFTC, the DOJ-FS, the DOJ-AD, the SEC and the New York
State Department of Financial Services are investigating a range of issues associated with Foreign Exchange sales and trading, including electronic
trading. The DOJ-AD is also investigating potential violations of US anti-trust laws. Certain of these investigations involve multiple market
participants in various countries. BBPLC has received enquiries from certain of these authorities related to their particular investigations, and from
other regulators interested in Foreign Exchange issues. The Group is reviewing its Foreign Exchange trading covering a several-year period and is
continuing to cooperate with the relevant authorities in their investigations.
In November 2014, the FCA and the CFTC entered into settlement agreements with several banks regarding Foreign Exchange trading. Barclays
announced that it had considered entering into the settlement, but after discussions with other regulators and authorities it concluded that it was
in the Group’s interest to seek a more general coordinated settlement and that it would continue to engage with these regulators and authorities,
including the FCA and CFTC, with the objective of achieving a resolution in due course.
In December 2014, the Hong Kong Monetary Authority (HKMA) announced the outcome of its investigation into the Foreign Exchange operations
of 10 banks in Hong Kong, including BBPLC. In respect of BBPLC, the HKMA said that its investigation revealed certain control deficiencies in
respect of which it required Barclays to take certain remedial steps, but also noted that, in recent years, BBPLC has made enhancements in line
with international trends.
Any resolution of the investigations into Foreign Exchange trading and sales and other practices relating to Foreign Exchange could result in
substantial monetary penalties. In addition, any resolution involving a criminal plea would have consequences that could include significant
restrictions on the Group’s current and future business activities.
For a discussion of litigation arising in connection with these investigations see ‘LIBOR and other Benchmarks Civil Actions’, ‘Civil Actions in
Respect of ISDAfix’, ‘Civil Actions in Respect of Foreign Exchange Trading’ and ‘Civil Actions in Respect of the Gold Fix’ below.
Claimed Amounts/Financial Impact
A provision of £1,250m was held as at 31 December 2014 (with provisions of £500m and £750m recognised in Q314 and Q414 respectively) for
certain aspects of ongoing investigations involving certain authorities and litigation relating to Foreign Exchange. It is not currently practicable to
estimate the further financial impact of the matters in this section (including the need to recognise additional provisions), or what effect, if any,
that these matters might have upon the Group’s operating results, cash flows or financial position in any particular period. Amongst other things,
any violations of criminal law that took place after entering into the DOJ NPA described above could constitute a violation of that NPA, which could
lead to additional substantial monetary penalties and significant adverse consequences for the Group’s current and future business operations.
LIBOR and other Benchmark Civil Actions
A number of individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in
relation to manipulation of LIBOR and/or other benchmark rates. While several of such cases have been dismissed and one has settled subject to
final approval from the court, others remain pending and their ultimate impact is unclear.