Barclays
has been fined a record £38m by the City regulator for failing to keep its
clients' money separate from its own.
The fine
comes three years after Barclays paid out £1.1m for a similar issue.
The
Financial Conduct Authority (FCA) said the bank's investment arm had put
£16.5bn of clients' money "at risk" between November 2007 and January
2012.
Barclays
said it did not profit from the issue and no customers lost out.
"Clients
risked incurring extra costs, lengthy delays or losing their assets if Barclays
had become insolvent," the FCA said.
And FCA
director of markets David Lawton said safeguarding client assets was
"key" to maintaining market confidence.
"Barclays
lack of focus on the rules was unacceptable," he added.
Barclays,
which
reported the issue to the FCA itself, said it accepted the FCA's finding.
"Barclays
has subsequently enhanced its systems to resolve these issues and to ensure we
have the requisite processes in place. No client has suffered any loss as a
consequence of this weakness in our processes which existed prior to January
2012," a spokesperson added.
'No excuse'
It is the
biggest fine ever issued for this particular offence.
However,
the FCA said Barclays received a 30% discount on the fine because it agreed to
settle it an an early stage.
Since the
2008 collapse of Lehman Brothers, when many of its clients were unable to
access their funds, the FCA has insisted that customers' money is kept separate
from the bank's own assets.
"All
firms should be clear after Lehman that there is no excuse for failing to
safeguard client assets," the FCA director of enforcement and financial
crime Tracey McDermott said.
The FSA,
the FCA's predecessor, fined JP Morgan £33.3m over the issue in 2010, the then
biggest penalty.
The
penalty comes as Barclays tries to defend itself against fraud charges in the
US in relation to the sale of mortgage bonds and follows a £26m fine in May for
fixing the gold price.
BBC
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