Barclays PLC has been fined £40 million by the UK Financial Conduct Authority for its failure to disclosure arrangements with ‘Qatari entities’ during the 2008 financial crash, the regulator said on Monday.

The fine against the London-based bank from the UK’s financial regulator comes after Barclays dropped a legal challenge against the FCA’s planned action.

The FCA said the fine was based on findings that Barclays’s October 2008 capital raising was ‘reckless and lacked integrity’.

The case involved the bank paying fees to Qatari entities that were key investors in fundraising efforts.

Barclays paid one Qatari entity £322 million in fees over a number of years, which it did not tell shareholders about, the FCA said.

The financial regulator previously had decided to impose a £50 million fine.

Barclays was set to challenge the fine from Monday at the Upper Tribunal, which independently hears appeals against enforcement cases. The FCA said it welcomes Barclays’ decision to withdraw the case.

The FCA said it recognises that the case ‘concerns disclosure decisions made in the context of very large and complex capital raisings that took place many years ago under considerable market pressure’.

‘Banks should treat their obligations to the market and shareholders seriously,’ it said.

The FCA first issued warning notices against Barclays in 2013, before the case was paused pending criminal proceedings, which were subsequently dismissed.

The FCA published decision notices setting out its case in October 2022.

Steve Smart, executive director of enforcement and market oversight at the FCA said: ‘Barclays’ misconduct was serious and meant investors did not have all the information they should have had. However, the events took place over 16 years ago and we recognise that Barclays is a very different organisation today, having implemented change across the business.

‘It is important that listed firms provide investors with the information they need.’

In a statement, Barclays said: ‘In view of the time elapsed since the events, Barclays wishes to draw a line under the issues referred to in the decision notices and has decided not to contest the decision notices further. Barclays does not accept the findings of the decision notices and this has been acknowledged by the FCA. Notwithstanding the difference of view, Barclays has concluded that the interests of the bank, its shareholders and other stakeholders are best served by withdrawing the references.’

Barclays said a provision for the financial penalty was taken back in 2022.

Shares in Barclays were up 1.6% to 261.38 pence in London on Monday morning.

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