Barclays Fined £42 Million for Money Laundering Failures

Barclays has been fined £42 million by the UK’s Financial Conduct Authority (FCA) for repeated failures to manage money laundering risks, including lapses tied to two significant cases involving WealthTek and Stunt & Co. The FCA cited two major instances where the bank failed to apply basic checks, highlighting serious deficiencies in its financial crime risk management practices.

The first case involved WealthTek, a now-defunct wealth manager at the center of a criminal probe. Barclays opened a client money account for the firm despite it not having FCA permission to hold client funds. This oversight increased the risk of misappropriation of client money or money laundering. In response, Barclays has agreed to repay £6.3 million to WealthTek clients who are still missing funds. WealthTek’s former chief, John Dance, has been charged with six counts of fraud, accused of using £64 million in client funds to bankroll racehorses and a Newcastle nightclub. He denies the charges, with a trial scheduled for 2027.

The second case involved Stunt & Co, the company run by James Stunt. The FCA said Barclays provided services to the firm while failing to assess its risk profile properly. Between 2015 and 2020, Stunt & Co received £46.8 million from Fowler Oldfield, which prosecutors later described as a major money laundering operation. Although police raided the offices of Stunt & Co and Fowler Oldfield in 2016, Barclays didn’t reclassify Stunt’s accounts as higher risk until years later. The bank only launched a deeper review after NatWest was charged in connection with the same case in 2021. Stunt was acquitted of criminal charges earlier this year, but two Fowler Oldfield executives were convicted.

The FCA emphasized that Barclays’ failures “facilitated the movement of funds linked to financial crime.” This is the third time in a decade the regulator has fined the bank over shortcomings in its financial crime controls. Previous fines included £72 million in 2015 over an “elephant deal” tied to Qatari clients, and a penalty in 2022 related to its links with the collapsed payments firm Premier FX. In response, Barclays stated that it fully cooperated with the regulator and continues to invest in strengthening its financial crime systems. The bank described the Stunt case as “historical” and insisted that no breaches of anti-money laundering rules were found.

Earlier in June, former Barclays CEO Jes Staley lost his appeal against a planned industry ban and fine over misleading the FCA about his ties to Jeffrey Epstein. Staley, 68, was accused by the FCA last year of downplaying the nature of his ties to Epstein. The watchdog proposed barring him from working in financial services and levying a £1.8 million fine. That penalty has now been trimmed to £1.1 million, partly due to Barclays’ earlier decision to withhold some information.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, emphasized the real consequences of poor financial crime controls, stating that they allow criminals to launder the proceeds of their crimes and fraudsters to defraud consumers. She urged banks to take responsibility and act promptly, particularly when obvious risks are brought to their attention. In the first case, Barclays secured a significant reduction in its fine through its extensive cooperation with the FCA’s investigation and by making a voluntary payment to affected consumers at the FCA’s request.

The FCA's statement also noted that Barclays continues to engage and invest in a significant remediation program to enhance its anti-money-laundering control framework. This fine serves as a stark reminder to financial institutions of the importance of robust financial crime risk management practices and the severe consequences of failing to meet regulatory standards.