The UK’s financial watchdog has fined Barclays £42 million over failings in its financial crime risk management.

The penalty being issued by the Financial Conduct Authority (FCA) relates to two separate cases, one linked to wealth management firm WealthTek and the other to precious metals production company Stunt & Co.

In the case of WealthTek, the bank failed to check it had gathered sufficient information to understand the its money laundering risk before opening a client money account for the business. This meant the bank missed that the company was not permitted by the regulator to hold client money.

WealthTek clients went on to deposit £34 million into the account.

In December 2024, the FCA separately charged WealthTek’s principal partner with multiple criminal offences, including money laundering and fraud.

The bank has since agreed to make a voluntary payment of £6.3 million to WealthTek’s clients who have a shortfall in the money they have been able to reclaim.

Barclays has also been fined £39.3 million for failing to adequately manage money laundering risks associated with providing banking services to Stunt & Co.

The FCA said that the financial institution did not gather enough information at the start of the relationship or carry out proper ongoing monitoring.

During a period of just over a year, Stunt & Co received £46.8 million from Fowler Oldfield, a multimillion-pound money laundering operation.

Barclays did not consider the money laundering risks associated with the company, despite receiving information from law enforcement about suspected money laundering through Fowler Oldfield, and after learning that the police had raided both firms.

According to the FCA, Barclays only conducted a review of its exposure to Fowler Oldfield through its customers, including Stunt & Co, after it learned of the watchdog's decision to prosecute NatWest over their relationship with Fowler Oldfield.

“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. "Banks need to take responsibility and act promptly, particularly when obvious risks are brought to their attention."

She continued: “In the first of these cases, Barclays secured a significant reduction in its fine through its extensive co-operation with our investigation and through making a voluntary payment to affected consumers at our request.”

Barclays is currently investing in a significant remediation programme to improve its anti-money laundering control framework.

A Barclays spokesperson said: “Barclays remains deeply committed to the fight against financial crime and fraud. The FCA’s investigation relating to Stunt & Co was centred around historical money laundering activity and made no findings that the bank had breached money laundering regulations. As acknowledged by the FCA, Barclays undertook an extensive review and self-reported its findings to the FCA. Barclays fully cooperated with both investigations and has further strengthened its financial crime and other control capabilities.”

Last week, the FCA also fined Monzo £21 million for failures in its anti-financial crime systems and controls.

According to the regulator, between October 2018 and August 2020 the digital bank failed to design and implement adequate customer onboarding, customer risk assessment and transaction monitoring systems to mitigate the risk of financial crime.

This led to the FCA conducting an independent review of the firm's financial crime framework in August 2020. It also imposed a requirement preventing the challenger from opening new accounts for high-risk customers.

However, the UK financial watchdog revealed that the company repeatedly breached this requirement between August 2020 and June 2022, signing up over 34,000 high-risk customers.

---