Barclays Faces £42 Million Fine: A Scandal of Oversight in Financial Crime Risk Management
Barclays Bank has been handed a staggering £42 million fine by the UK’s Financial Conduct Authority (FCA) for serious lapses in its money laundering risk management practices. The fine stems from the bank’s failure to adequately vet two clients, Stunt & Co and WealthTek, which resulted in the bank unintentionally aiding in the movement of funds associated with financial crimes.
The FCA’s findings indicated that Barclays facilitated transactions for Stunt & Co, which received £46.8 million from Fowler Oldfield, a notorious money laundering operation. The regulator emphasized that Barclays had neglected to conduct adequate ongoing monitoring of Stunt & Co’s account, only reviewing it after learning of the FCA’s prosecution of NatWest related to a similar issue.
Regarding WealthTek, the FCA pointed out that Barclays failed to perform a straightforward check on the firm, which was not authorized to handle client funds according to the Financial Services Register. This negligence poses risks for client money misappropriation or money laundering, a concern underscored by the FCA’s ongoing investigation that led to charges against John Dance, one of WealthTek’s leading partners, on counts of money laundering and fraud.
Despite the severity of the findings, Barclays asserted that it has cooperated extensively with the FCA and has implemented stronger controls against financial crime. The bank also highlighted that the FCA’s investigation concerning Stunt & Co focused on historical activities and did not conclude any breach of money laundering regulations.
Furthermore, this is not the first sanction for Barclays regarding financial crime; the bank faced previous fines in 2022 and 2015 for similar deficiencies in overseeing high-risk clients and operations. This latest fine reflects a repeating pattern of oversight failures, nudging Barclays to reinforce its commitment to combating financial crime and fraud, amidst increasing scrutiny.