FCA Uncovers Critical Oversight Lapses
The UK Financial Conduct Authority (FCA) has imposed a £42 million penalty on Barclays Bank for severe anti-money laundering (AML) control failures. The regulator identified two glaring cases where Barclays neglected basic due diligence, exposing the bank to criminal activity and putting customer funds at risk.
Case 1: Gold Bullion Firm Red Flags Ignored
Barclays received its largest fine (£39.3 million) for mishandling the Stunt & Co account, a gold bullion trader. Between 2018-2019, the bank processed £46.8 million in suspicious transactions from Fowler Oldfield – a jewelry firm already under police investigation for money laundering.
Key failures included:
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Continuing transactions after law enforcement notified Barclays about the police raids
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Failing to conduct enhanced due diligence
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Ignoring obvious red flags about the source of funds
Case 2: Unauthorized Wealth Management Account
In a separate incident, Barclays opened accounts for WealthTek LLP without verifying its regulatory status. A simple Financial Services Register check would have revealed:
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WealthTek lacked authorization to hold client money
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The firm’s principal had undisclosed criminal investigations
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£34 million in client deposits were ultimately compromised
Barclays has agreed to repay £6.3 million to affected customers following WealthTek’s collapse.
Regulatory Crackdown Intensifies
FCA Executive Director Therese Chambers stated: “When we highlight risks, banks must respond immediately. Poor financial crime controls have real consequences.” The enforcement action comes as:
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UK authorities ramp up AML enforcement
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WealthTek’s principal faces fraud charges
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Banks face growing pressure to strengthen compliance
Industry-Wide Implications
This penalty sends clear messages to financial institutions:
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Transaction monitoring systems require constant review
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Law enforcement alerts demand immediate action
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Basic regulatory checks remain essential
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Consequences for failures are escalating
Barclays has committed to overhauling its financial crime controls, but the damage to its compliance reputation may linger. The case establishes a new benchmark for AML enforcement severity in the UK banking sector.