Judge rules Barclays cannot escape trial over alleged role in £90m Ponzi scheme, with the bank facing potential liability of up to £37m

Barclays faces a trial after a judge last week refused to strike out claims brought by liquidators Begbies Traynor over the bank's role in a collapsed £90m investment scheme. The bank could be on the hook for as much as £37m in connection with banking services it provided to a company called Denaro from 2013 until its collapse approximately a decade later. Denaro was established in Liverpool by three individuals, described as an IT worker, a car mechanic and a carpet salesman, none of whom had finance backgrounds. The company raised money from nearly 1,000 retail investors by offering monthly returns of 3% on notional loans. At its peak the scheme held assets in excess of £41m. The company closed to new investors in 2019 and was subsequently ordered to be shut down. Liquidators allege that Denaro's founders used the company's Barclays account to channel investor funds into a separate partnership account, also held at Barclays, from which large sums were withdrawn for personal use. The remainder was recycled back into the company account to fund apparent interest payments to earlier investors, a structure the liquidators characterise as a Ponzi scheme (a fraud in which returns to existing investors are paid from new investor funds rather than genuine profits). Barclays relationship manager Andrew Wileman, who managed both accounts and remains a bank employee, is alleged to have "dishonestly assisted" the directors in their alleged breaches of fiduciary duty by approving tens of millions in inter-account transfers without raising concerns. Evidence shows Wileman endorsed a "wholly misleading" description of Denaro to a risk assessment colleague in 2020, leading to the bank recording it was "comfortable" with the arrangement. Barclays sought to have the claim dismissed, but the judge ruled the case can proceed to trial.