Barclays fined £38 million for putting customer assets at risk

Barclays hit with massive fine for failing to protect clients' assets.

Barclays has been hit with the biggest fine ever handed out by the financial regulator, the Financial Conduct Authority (FCA), a whopping £38 million.

This fine reflects “significant weaknesses” in the systems and controls in Barclays’ Investment Banking Division between 2007 and January 2012 along with the number of affected accounts.

The regulator said Barclays failed to properly protect clients’ custody assets, which are worth a whopping £16.5 billion. City rules mean banks should keep their clients' money separate from their own assets, but Barclays didn't do that. As a result, these clients were at risk of incurring extra costs, long delays and losing their assets if Barclays went bust.

Breaking the rules

Barclays didn’t adhere to the rules when opening 95 custody accounts in 21 countries. As a result, the bank didn’t correctly reflect which company within its Investment Banking Division was responsible for assets in the accounts.

These failings were compounded by flaws in account naming or incorrect data that suggested that assets belonged to Barclays instead of its clients. 

This is the second time Barclays has been fined for failing to segregate its customers' assets properly, having been fined £1.1 million three years ago.

Barclays agreed to settle at an early stage, which meant a 30% discount on the fine. Otherwise it would have been hit with a £54 million fine.

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