The Financial Conduct Authority (FCA) said the individuals were “ultra-high-net-worth”, and should have been subject to extra checks. The fine is the biggest levied by UK regulators for failings linked to potential financial crime.
Barclays used a lower level of due diligence and did not follow standard policies, the FCA said, as it ruled the bank sought to take on the “politically exposed” clients as quickly as possible to make £52.3m in revenues, while keeping the deal highly confidential even internally.
While the FCA said the deal did not involve any financial crime, it said the nature of the transaction and people involved should have alerted the bank to the need for extra monitoring.
It added that the group went to “unacceptable lengths to accommodate the clients”, failing to ask for key information as it “did not wish to inconvenience” them.
The slapdown is an unwelcome embarrassment for incoming Barclays chief executive Jes Staley, who takes up his post in December.
Barclays agreed to a clause that would see the clients paid £37.7m if confidentiality was breached. The bank did not keep electronic records of its due diligence relating to the transaction, instead keeping only hard copies in a specially bought safe, the regulator said. The fine levied on the bank comprises the £52.3m it made from handling the transaction as well as an additional £19.8m penalty.
Mark Steward, FCA director of enforcement, said: “Barclays ignored its own process designed to safeguard against the risk of financial crime and overlooked obvious red flags to win new business and generate significant revenue. This is wholly unacceptable.”
Steward said financial firms would be “held to account if they fail to minimise financial criminal risks appropriately”.
The transaction was done in 2011 and 2012, just before the bank became embroiled in the Libor interbank rate-rigging scandal that claimed the scalp of a former boss, Bob Diamond.
• Lloyds Banking Group has announced details of up to 1,000 job losses, part of previously announced cuts of about 9,000.
The losses will be in retail banking, commercial banking, human resources, group products and marketing, consumer finance, risk and finance. Lloyds said it would seek to use voluntary redundancy, and that compulsory redundancies would only be a “last resort”.