Barclays fined £72m for rushing crime checks in order not to 'inconvenience' ultra-rich clients

In revelatory details of the FCA’s findings, it said Barclays went to “unacceptable lengths to accommodate the clients”, failing to ask for key information as it “did not wish to inconvenience” them.

Barclays even bought a safe to store hard copies relating to the deal to keep it under wraps, even within the bank, and agreed to a clause that would see it pay £37.7 million to the clients if their confidentiality was broken.

The deal was the biggest of its kind ever handled by the bank – known within Barclays as an “elephant deal” due to its size.

The FCA stressed that the deal did not involve any financial crime and said it was making no criticism of the clients involved.

But it said that given the clients were “politically exposed persons” – seen to be at greater risk of potential involvement in bribery or corruption – the transaction should have been subject to extra checks and monitoring.

The nature of the transaction should also have flagged up the need for extra checks within Barclays, it added, revealing that names were omitted from some transfers.

The FCA found Barclays in fact used fewer checks than it normally would for lower profile deals and accused the bank of seeking to take on the clients as quickly as possible to make £52.3 million in revenues.

One of the select few senior bosses at Barclays who was aware of the deal said he wanted to “race this through”, according to the final notice of the FCA’s action against Barclays.

It also revealed that one manager said it could be the “deal of the century” when the clients first approached the bank in 2011, when it was thought to be worth even more money.

The FCA found few people at Barclays were aware of the existence or location of the hard copy records relating to the deal, with no details kept on any of its systems.

This meant Barclays was unable to respond to the FCA’s request for information promptly.

The fine is the largest levied by UK regulators for financial crime failings.

It would have been higher had Barclays not settled early, which saw the penalty reduced by 30%.

The levy comprises the £52.3 million Barclays made from handling the transaction as well as an additional £19.8 million penalty.

Mark Steward, director of enforcement and market oversight at the FCA, said: “Barclays ignored its own process designed to safeguard against the risk of financial crime and overlooked obvious red flags to win new business and generate significant revenue. This is wholly unacceptable.

“Firms will be held to account if they fail to minimise financial crime risks appropriately.”

Barclays stressed that the FCA made no finding of financial crime relating to the transaction or the clients.

It added: “Barclays has co-operated fully with the FCA throughout and continues to apply significant resources and training to ensure compliance with all legal and regulatory requirements.”

The transaction was arranged and completed in 2011 and 2012, just before the bank became embroiled in the Libor interbank rate-rigging scandal, which claimed the scalp of its former boss Bob Diamond and threw the lender into a reputational crisis.

Robert Barrington, executive director of Transparency International UK, said the bank’s failures surrounding the deal were “extremely disappointing”.

He added: “The banks are meant to be this country’s front-line defence against money laundering, and this failure, coming on top of others, suggests that the system needs a radical overhaul.

“While we welcome the regulatory action and the fact that the company has co-operated with the investigation, for a failure on this scale we would expect to see action taken against key individuals, which may include prosecution or being de-barred from working in financial services.”