Barclays Bank is once more under fire for misconduct. It is threatened with substantial penalties at least partly because of its inability to appropriately control risks for financial crime. As a result, the UK’s Financial Conduct Authority (FCA) hit the bank with a £42 million fine. This penalty is due in part to the bank’s negligence in monitoring the accounts associated with Stunt & Co. This latest consumer abuse comes on the heels of a significant and growing history of financial oversight problems for the country’s largest banking institution.
The FCA’s investigation revealed significant failings at Barclays. The bank’s lack of appropriate ongoing monitoring of its relationship with Stunt & Co was particularly shocking. £46.8 million of which was sent by Fowler Oldfield – a confirmed money laundering operation. These failures are further aggravated by Barclays’ tardy action in undertaking a review of its exposure to Fowler Oldfield. This review only occurred after the FCA announced its decision to prosecute NatWest over its interactions with the very same firm.
In 2022, Barclays was fined £783,800 for oversight failings linked to its relationship with the collapsed payments firm Premier FX. The result of this was in 2015 the bank was slapped with a record £72 million penalty. They abjectly mismanaged the financial crime risks posed by some of their very richest clients. Each of these penalties serves to emphasize a broader tradition of regulatory scrutiny aimed at Barclays’ compliance culture.
“In the space of just over a year, Stunt & Co received £46.8 million from Fowler Oldfield, a multimillion-pound money laundering operation,” – FCA
In spite of these conclusions, Barclays has announced its desire to police financial crime. The bank emphasized that it “remains deeply committed to the fight against financial crime and fraud.” In its response, Barclays made it clear that the FCA’s investigation into Stunt & Co focused exclusively on historic behavior. To be clear, their investigation found no evidence that the bank was violating any money laundering laws.
That’s a recent fine of £39.3 million, all connected with Stunt & Co. This substantial penalty underscores the egregiousness of these violations. To reach its clean financial break, Barclays went through an exhaustive financial review of its operations. They subsequently published their findings with the FCA, which led to a significant reduction on the fine related to the WealthTek investigation. The bank paid out a total of US $350 million voluntarily to clients impacted by this investigation.
“As acknowledged by the FCA, Barclays undertook an extensive review and self-reported its findings to the FCA,” – Barclays
As Barclays fights on under these dark clouds, it is under greater compulsion to build additional binding measures into its compliance and risk management fire. Industry regulators such as the FCA are keeping a close eye on the new bank. It should move with some urgency to repair the vulnerabilities, as well as restore stakeholder confidence.