Barclays fined for failing to safeguard against financial crime

Barclays

Due to the fact that Barclays failed “to minimise the risk it may have been used to facilitate financial crime”, the bank has been fined £72 million by the Financial Conduct Authority (FCA).

This comes after the bank was also fined $150 million in the US because of its electronic currencies trading systems and the FCA has released a statement to explain the faults that Barclays were involved with.

“The failings relate to a £1.88 billion transaction that Barclays arranged and executed in 2011 and 2012 for a number of ultra-high net worth clients. The clients involved were politically exposed persons and should therefore have been subject to enhanced levels of due diligence and monitoring by Barclays,” the statement read.

There is no concrete evidence that this transaction was the reason the bank was fined but CityAM reported that there was a lower level of due diligence than the policies in place for lower risk profile transactions.

Director of enforcement and market oversight at the FCA, Mark Steward, said that this was wholly unacceptable. “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,” Steward said.

It was also reported this week that Barclays decided to settle with the US investors that were affected by the Libor rigging and Reuters reported that the bank “turned a blind eye” when traders manipulated Libor to increase profits and build upon reputation.

The London Interbank Offered Rate, or Libor, is used by banks to work out the cost of borrowing from one another and this settlement was made public 11 days after the bank agreed to pay $120 million to solve other manipulation claims by investors that transacted directly with banks which made up a panel that determined Libor, according to Reuters.

Business Insider reported that Barclays were considering moving headquarters from London to New York, but decided against it because the bank is “one of Britain’s best-known finance brands names.”

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