Banking giant Barclays Bank plc has been hit with £42 million in sanctions for failures in its controls to guard against financial crime — shortcomings that allowed a pair of alleged schemes to operate through the bank’s facilities.
The U.K.’s Financial Conduct Authority (FCA) sanctioned the bank and its affiliate, Barclays Bank UK plc, for failing to guard against money laundering risks when they opened accounts for two firms — WealthTek and Stunt & Co. — both of which have since been implicated in alleged financial crimes.
Specifically, the FCA fined the bank £39.3 million for failing to guard against money laundering risks by providing banking services to Stunt & Co., which allegedly received £46.8 million through a laundering scheme involving Fowler Oldfield.
“Barclays failed to properly consider the money laundering risks associated with the firm even after receiving information from law enforcement about suspected money laundering through Fowler Oldfield, and after learning that the police had raided both firms,” the FCA said in a release.
The bank only launched an internal investigation into its exposure after the FCA began prosecuting another bank, NatWest, over its relationship with Fowler Oldfield.
In March, two former directors of Fowler Oldfield were convicted of money laundering and sentenced to more than 10 years in prison. However, the owner of Stunt & Co. was acquitted of money laundering charges.
The FCA said Barclays qualified for a discount on its fine, which was reduced to £39.3 million from £56.2 million, after agreeing to settle the case.
Separately, the regulator levied a £3-million fine on Barclays Bank UK for its dealings with WealthTek. That firm’s principal, John Dance, was charged with three counts of fraud by abuse of position and three counts of fraud by false representation in connection with the alleged misappropriation of £64 million from clients between 2014 and 2023.
Dance pleaded not guilty to all charges, which have not been proven in court. His trial is scheduled for September 2027 at Southwark Crown Court.
Regulatory proceedings brought by the FCA against WealthTek have been paused by consent, pending the outcome of the criminal case.
In its proceeding against Barclays, the FCA said the bank failed to carry out a basic registration check on the firm, which would have revealed that the regulator had ruled it was not permitted to hold client money. Without that check, Barclays opened an account to hold client funds, which subsequently received £34 million in deposits.
The FCA said it settled the charges after Barclays voluntarily agreed to pay £6.3 million to WealthTek clients who lost money.
That remediation effort — along with the bank’s “extensive co-operation,” which contributed to an expedited settlement — led to a “significant reduction” in its financial penalty, the FCA said. The regulator also reduced its proposed fine in that case from £4.4 million.
In addition to the monetary sanctions, the FCA said: “Barclays continues to engage and invest in a significant remediation programme to enhance its anti-money laundering control framework.”
“The consequences of poor financial crime controls are very real — they allow criminals to launder the proceeds of their crimes, and they allow fraudsters to defraud consumers,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA, in a release.
“Banks need to take responsibility and act promptly, particularly when obvious risks are brought to their attention,” she said.