FCA fines Barclays £72m for poor handling of financial crime risks

The Financial Conduct Authority has fined Barclays Bank £72.1m for the poor handling of financial crime risks.

The UK’s financial regulator said the failings relate to a £1.88bn transaction that Barclays arranged and carried out in 2011 and 2012 for a number of ultra-high-net-worth clients who were politically exposed persons and should therefore have been subject to enhanced levels of due diligence and monitoring.

The FCA said Barclays did not follow its standard procedures, preferring instead to take on the clients as quickly as possible and thereby generated £52.3m in revenue.

Mark Steward, director of enforcement and market oversight at the FCA, said: “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.”

The FCA found that Barclays senior management failed to adequately oversee the bank’s handling of the financial crime risks associated with the business relationship and that it was unclear which senior managers were in charge of doing so.

Barclays did not sufficiently corroborate the clients’ stated source of wealth and source of funds, the FCA said.

Barclays agreed to settle at an early stage of the investigation so it qualified for a 30% discount.

At 0915 GMT, Barclays shares were up 1% at 223.75p.