Barclays has been fined a record £38m
Barclays has been fined a record £38m by the City regulator exposing customers to unnecessary risks by failing to ensure client assets were properly safeguarded and adequate records kept. The fine comes three years after Barclays paid out £1.1m for a similar issue for failing to ring-fence client money in one of its accounts for more than eight years.
It is the biggest fine ever issued for this particular offence, Britain’s financial regulator said there were “significant weaknesses” in Barclays’ systems and controls between November 2007 and January 2012 that put 16.5 billion pounds of client’s assets at risk. Barclays responded saying it did not profit from the issue and no customers lost out. It had no impact on its retail customers.
The Financial Conduct Authority (FCA), which has tightened rules governing client asset protection since the collapse of Wall Street bank Lehman Brothers in 2008, said that customers risked incurring extra costs, lengthy delays or losing their assets if the bank had become insolvent.
“Barclays failed to apply the lessons from our previous enforcement actions, numerous industry-wide warnings and exposed its clients to unnecessary risk,” said Tracey McDermott, the head of enforcement and financial crime at the FCA.
“All firms should be clear after Lehman that there is no excuse for failing to safeguard client assets.”
Barclays, which said it did not profit from these failings and that no customer had lost money, qualified for a 30 percent fine reduction because it cooperated with the FCA. This reduced the penalty from an original 54 million pounds.
“Barclays identified and self-reported to the FCA the issues giving rise to the FCA’s findings and we accept their conclusion,” the bank said in an emailed statement. “Barclays has subsequently enhanced its systems to resolve these issues and to ensure we have the requisite processes in place.”
The penalty comes as Barclays tries to defend itself against fraud charges in the US in relation to the sale of mortgage bonds and follows a £26m fine in May for fixing the gold price.