The bank’s investment arm, Barclays Capital, has been made to pay £1.12m by the Financial Services Authority (FSA) for failing to protect and segregate clients’ money on an intra-day basis between 2001 to 2009.
FSA director of enforcement Margaret Cole has cracked down on the rules around client money handling following the bankruptcy of Lehman Brothers in 2008.
The US lender’s European arm failed to segregate billions of dollars of client’s funds from its own accounts, leading to a series of court cases filed by creditors.
Cole said: “Barclays Capital committed a serious breach of FSA client money rules by failing to segregate millions of pounds of its clients’ money for over eight years. This posed a significant risk and the penalty reflects the amount of client money involved in this breach.”
Barclays said it closely cooperated with the FSA throughout the probe.
A spokesperson said: “The segregation error was corrected on discovery. No counterparties, clients, or financial reports were affected and Barclays Capital did not profit in any way.”
The latest fine comes after the FSA hit Barclays with a record £7.7m fine for mis-selling investment products to more than 12,000 clients that lost money during the financial crisis.
Separately, the bank yesterday announced it would cut 1,000 jobs in its UK retail operation.
Barclays plans to move its financial planning advice service online due to a continuing trend by consumers to manage investments over the internet.