Barclays faces £42 million fine for failing to control money laundering risks

In the United Kingdom, Barclays Bank has faced significant scrutiny from the Financial Conduct Authority (FCA) due to its inadequate management of money laundering risks. This scrutiny culminated in a total of £42 million in fines tied to severe failings in two specific cases involving the companies Stunt & Co and WealthTek. The FCA emphasized the bank's inability to effectively gather necessary information and perform ongoing monitoring after establishing banking services for these firms. Even after receiving alerts from law enforcement regarding suspected money laundering, Barclays did not act sufficiently to mitigate these risks. Furthermore, Barclays Bank UK was fined £3.1 million for failing to verify information regarding its client money account for WealthTek, which was not authorized by the FCA to hold client funds, leading to a disruption where clients deposited £34 million into the account without appropriate safeguards in place. As a response to these findings, Barclays has agreed to a voluntary payment of £6.3 million to WealthTek’s clients who are currently facing financial losses. The FCA's enforcement director underscored the tangible consequences of poor financial crime controls, noting that they enable criminal activity and undermine consumer trust. As a bank, the onus is on Barclays to act promptly and responsibly when faced with evident risks, which it failed to do in these instances. The extensive cooperation from Barclays during the investigation did lead to a significant reduction in its penalty amount, showcasing that accountability and resolution are imperative in the banking sector amidst allegations of financial misconduct.