The former boss of Barclays faces a maximum 22 year prison sentence after he and three other ex-directors of the lender became the first British bankers to face criminal charges for actions taken during the financial crisis.
Barclays was plunged into turmoil on Tuesday after the Serious Fraud Office charged the bank with fraud and unlawful financial assistance over its dealings with Qatari investors, including former prime minister Sheikh Hamad bin Jassim bin Jabr al-Thani, in 2008 when Britain's banking system was on the verge of collapse.
The lender turned to the Qataris as well as other private investors for two huge cash calls in June and October 2008 that raised a total of £11.8bn in a desperate bid to avoid a bail-out.
However, the SFO has spent five years investigating side deals the bank struck with the Qataris alongside the fundraisings, in an extensive and high-profile probe that has involved interviews with more than 45 individuals.
Its charges focus on so-called "advisory services agreements" for payments totalling £322m made by Barclays to the Qataris, as well as a $3bn loan from the bank to the Gulf state. The Qataris, who contributed roughly half the money Barclays raised in 2008, have not been accused of wrongdoing.
As well as charging the bank on all counts, the SFO charged John Varley, Barclays' former chief executive who stood down in 2011; Roger Jenkins, its former star banker who led its Middle Eastern business; Thomas Kalaris, who led its wealth division; and Richard Boath, the ex-head of its financial institutions group, with conspiracy to commit fraud in the June fundraise. Mr Varley and Mr Jenkins also face the same charge over the October cash call as well as the unlawful financial assistance charge related to the $3bn loan.
The fraud charges each carry maximum prison sentences of 10 years, while the unlawful financial assistance charge carries a possible two year term. The bank could be fined. The defendants will appear in Westminster magistrates' court on July 3 at 2pm.
The developments mark a dramatic fall from grace for Mr Varley who had earned plaudits for avoiding the nationalisations forced upon Royal Bank of Scotland and Lloyds. His lawyer declined to comment although FTSE 100 mining giant Rio Tinto announced that he had resigned as its senior independent director.
Barclays said it was "considering its position" and pleas from the bank are not expected until its lawyers have had time to examine the SFO's case against it. A lawyer for Mr Kalaris declined to comment.
Mr Jenkins' lawyer said he "intends to vigorously defend against these charges". Mr Boath said he "will contest these charges vigorously" and that the SFO had "a false understanding of my role and the facts".
The bank's Qatar dealings are also the subject of inquiries by City watchdog the Financial Conduct Authority and US regulators. The decision by the SFO piles yet more scandal on Barclays. Chief Jes Staley faces a regulatory probe into his own conduct. The bank has also failed to reach a settlement with US authorities over allegations it mis-sold toxic mortgage-backed securities.
Barclays shares closed down 1.9pc to 202.8p yesterday.