Barclays Fined $56 million for Money-Laundering lapses

Barclays Bank has been penalized £42 million by the United Kingdom's Financial Conduct Authority (FCA) due to shortcomings in its management of money laundering risks. The regulatory body highlighted that Barclays failed to adequately vet two of its clients—Stunt & Co and WealthTek—thereby enabling the movement of funds associated with financial crimes.

The FCA stated that Barclays' relationship with Stunt & Co intensified the risk of client funds being misappropriated or used for money laundering. According to the FCA, Stunt & Co received £46.8 million linked to Fowler Oldfield, a known entity involved in significant money laundering activities, within a year. It was noted that Barclays did not conduct appropriate ongoing monitoring of its account with Stunt & Co, only examining its exposure to Fowler Oldfield after becoming aware of the FCA's prosecution of NatWest for its dealings with the same entity.

The bulk of the penalty, amounting to £39.3 million, pertained to the bank's dealings with Stunt & Co. The remaining £2.7 million was related to WealthTek, with the FCA indicating that if Barclays had performed a basic check, it would have discovered that WealthTek was not authorized by the FCA to manage client funds. The FCA explained that one straightforward step, such as reviewing the Financial Services Register, could have helped Barclays identify this issue.

In December 2024, John Dance, a principal partner at WealthTek, faced multiple criminal charges, including money laundering and fraud, with his trial scheduled to commence in September 2027 at Southwark Crown Court.

Therese Chambers, a senior member of the FCA's enforcement division, emphasized that Barclays received a significant reduction in its fine due to its extensive co-operation throughout the investigation and its voluntary payments to impacted clients, although the specifics of these payments were not disclosed. Barclays responded affirmatively, stating its ongoing commitment to combating financial crime and fraud.

The bank declared, "The FCA’s investigation concerning Stunt & Co focused on historical money laundering activities, and it made no findings that the bank violated money laundering regulations." Barclays also pointed out its proactive measures, including a comprehensive review and self-reporting of its findings to the FCA.

This recent fine reflects Barclays' ongoing challenges with financial crime controls; it marks the third time the bank has faced penalties from the FCA in this area. In 2022, Barclays was levied a fine of £783,800 due to oversight issues concerning its relationship with Premier FX, a payments firm that faced scrutiny for high risks associated with financial crime and fraud. Additionally, in 2015, Barclays was fined £72 million for failing to address financial crime risks adequately in its dealings with certain ultra-wealthy clients, some of whom had high political profiles.

As financial regulatory scrutiny continues to increase, Barclays’ situation serves as a cautionary tale regarding the importance of rigorous client vetting and ongoing monitoring to prevent potential money laundering activities.