British banking giant fined for exposing customers to unnecessary risks by failing to ensure client assets were properly safeguarded
British bank Barclays was fined 38 million pounds ($62 million) on Tuesday for exposing customers to unnecessary risks by failing to ensure client assets were properly safeguarded and adequate records kept.
Imposing its highest fine for client asset breaches, Britain's financial regulator said there were "significant weaknesses" in Barclays' systems and controls between November 2007 and January 2012 that put 16.5 billion pounds of client's assets at risk.
The Financial Conduct Authority (FCA), which has tightened rules governing client asset protection since the collapse of Wall Street bank Lehman Brothers in 2008, said that customers risked incurring extra costs, lengthy delays or losing their assets if the bank had become insolvent.
"Barclays failed to apply the lessons from our previous enforcement actions, numerous industry-wide warnings and exposed its clients to unnecessary risk," said Tracey McDermott, the head of enforcement and financial crime at the FCA.
"All firms should be clear after Lehman that there is no excuse for failing to safeguard client assets."
Barclays, which said it did not profit from these failings and that no customer had lost money, qualified for a 30 percent fine reduction because it cooperated with the FCA. This reduced the penalty from an original 54 million pounds.
"Barclays identified and self-reported to the FCA the issues giving rise to the FCA's findings and we accept their conclusion," the bank said in an emailed statement. "Barclays has subsequently enhanced its systems to resolve these issues and to ensure we have the requisite processes in place."