Barclays is to be fined £38m for breaching City rules requiring clients’ funds to be kept separate from its own assets, in what is expected to be the largest fine for such an offence.
The penalty, expected to be announced by the Financial Conduct Authority on Tuesday, will be the latest setback for the bank in its attempt to clean up its reputation in the wake of the 2012 Libor rigging scandal.
The £38m fine is the second punishment Barclays has received for breaches of client asset rules. It is bigger than the £33m imposed on JP Morgan in 2010, when City regulators began focusing on client asset rules in the wake of the collapse of Lehman Brothers.
The unwinding of Lehman has proved more complex because its own assets were mixed up with those clients, making it more difficult to pay them back. Almost a dozen fines have been handed out for this breach of the rules, which in Barclays’ case is thought to cover the period between 2007 and 2012.
While this time frame predates the appointment of Antony Jenkins as chief executive, the latest punishment comes as he attempts to defend the bank against fraud charges in the US in relation to the sale of mortgage bonds and after a £26m fine in May for fixing the gold price.
There had been reports that the latest fine for Barclays could be as high as £60m, which would have been on top of the £1.1m it was fined in 2011 for failing to keep clients’ money separate from its own. That penalty was levied on the investment banking arm of Barclays, which is also thought likely to receive the latest fine.
Neither Barclays nor the FCA would comment on the report on Sky News about the fine being announced on Tuesday.
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