Barclays Bank Fined Over Poor Handling Of Money Laundering

Barclays Bank has been penalized with a total fine of £42.4 million by the Financial Conduct Authority (FCA) for deficiencies in addressing money laundering risks associated with two distinct cases involving WealthTek and Stunt & Co.

The FCA levied a £39.3 million fine on Barclays for inadequate safeguards against money laundering risks tied to Stunt & Co, a company operated by socialite James Stunt. The bank was faulted for not collecting adequate information at the outset of the business relationship and for failing to perform proper continuous monitoring. During this time, Stunt & Co received £46.8 million from Fowler Oldfield, which the FCA described as a “multimillion-pound money laundering operation.” Barclays also neglected to respond despite alerts from law enforcement and police raids on both companies. James Stunt was acquitted earlier this year of involvement in a £200 million money laundering scheme.

In a separate case, Barclays Bank UK was fined £3.1 million for not adequately evaluating money laundering risks prior to opening a client money account for WealthTek, a wealth management firm that has since collapsed. The FCA pointed out that Barclays failed to recognize that WealthTek lacked authorization to hold client funds before £34 million was deposited into the account. Barclays has committed to a voluntary payment of £6.3 million to WealthTek’s clients who are facing financial losses.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said the failures allowed criminals to launder proceeds of crime and fraudsters to defraud consumers, stressing that banks must respond promptly when risks emerge. She also noted Barclays received a significant fine reduction due to its cooperation and voluntary payments to affected consumers.

Barclays responded by affirming its strong dedication to combating financial crime, stating that the FCA investigation centered on past activities and did not identify breaches of money laundering regulations. The bank emphasized its thorough review, self-reporting, and cooperation with the FCA, along with measures implemented to enhance financial crime controls.

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Nnamdi Okoli