Barclays slapped with £42m fine for financial crime failings
Barclays has been hit with a £42m fine by the Financial Conduct Authority (FCA) for separate instances where the bank failed in its financial crime risk management.
The City watchdog blasted Barclays for failing to check it had gathered “sufficient information to understand the money laundering risk” before it opened a client money account for wealth management firm WealthTek.
The FCA said “one simple check” would have resolved the matter if Barclays had looked at the Financial Services register before opening the account and seen WealthTek was not permitted by the FCA to hold client money.
The regulator said the lack of correct information increased the risk of misappropriation of client money or money laundering, with clients depositing £34m into the account.
Barclays made a voluntary payment of £6.3m to WealthTek’s clients, who have a “shortfall in the the money they have been able to reclaim”.
Banks must act promptly on ‘obvious risks’
The watchdog slammed Barclays for another instance where it failed to “adequately manage money laundering risks associated with providing banking services to Stunt & Co.”
Stunt & Co. – a precious metals company – received £46.8m from multimillion-pound money laundering operation Fowler Oldfield in just over a year.
The FCA said Barclays only reviewed its exposure to Fowler Oldfield after it learned of the regulator’s decision to prosecute Natwest over its ties. Natwest was slapped with a £264.8m fine for anti-money laundering failures.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “The consequences of poor financial crime controls are very real – they allow criminals to launder the proceeds of their crimes, and they allow fraudsters to defraud consumers. Banks need to take responsibility and act promptly, particularly when obvious risks are brought to their attention.”
Barclays received a “significant reduction” on the first fine due to its “extensive co-operation” and voluntary payment to WealthTek.
A spokesperson for Barclays said: “Barclays remains deeply committed to the fight against financial crime and fraud. The FCA’s investigation relating to Stunt & Co was centred around historical money laundering activity and made no findings that the bank had breached money laundering regulations.
“As acknowledged by the FCA, Barclays undertook an extensive review and self-reported its findings to the FCA. Barclays fully cooperated with both investigations and has further strengthened its financial crime and other control capabilities.”
Just last week, fintech veteran Monzo was slapped with a £21m fine by the FCA after “repeatedly” opening accounts for “high-risk” customers.