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FCA fines Barclays £72m over financial crime risk failures

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Barclays has been fined £72m by the FCA for failing to minimise the risk the bank could be used to facilitate crime.

It is the largest fine ever imposed by the regulator, or its predecessor, for financial crime failings.

The failings relate to a £1.88bn transaction the bank arranged for ultra-high network clients in 2011 and 2012.

It was the largest deal of its kind Barclays has ever executed for individuals and earned the bank £52.3m.

While the regulator found no evidence the deal had been used for criminal purposes, it said Barclays “went to unacceptable lengths to accommodate the clients”.

It says because the individuals were politically exposed persons the bank should have applied extra due diligence and monitoring.

However, the FCA found Barclays applied a lower level of scrutiny than was used with less risky relationships.

The FCA says: “Barclays did not follow its standard procedures, preferring instead to take on the clients as quickly as possible.”

Barclays was found to have ignored requirements to collect information “because it did not wish to inconvenience the clients”.

In addition, Barclays agreed to keep details of the deal confidential “even within the firm”.

The clients were given indemnity up to £37.7m if the bank was found to have broken the confidentiality agreement.

The fine, which was discounted by 30 per cent as Barclays agreed to settle early in the process, is comprised of the revenue earned on the deal and a £19.8m penalty.

FCA director of enforcement and market oversight Mark Steward says: “Barclays ignored its own process designed to safeguard against the risk of financial crime and overlooked obvious red flags to win new business and generate significant revenue. This is wholly unacceptable.

“Firms will be held to account if they fail to minimise financial crime risks appropriately and for this reason the FCA has required Barclays to disgorge its revenue from the transaction.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Are you sure the FCA aren’t just looking for these large deals, finding fault so it then enables them to set a large fine?

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