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Barclays has been handed a £42mn fine for failing to manage the risk around money laundering, including in a case that embroiled the former son-in-law of Formula 1 magnate Bernie Ecclestone.
The Financial Conduct Authority fined Barclays on Wednesday over two big cases linked to criminal proceedings. It is the third time in a decade that the bank has fallen foul of the regulator’s expectations concerning managing financial crime risks.
In the latest instance, the FCA found that Barclays had opened a client money account for wealth manager WealthTek, which has since been shut down for “serious regulatory and operational issues”.
“One simple check it could have done was to look at the Financial Services Register before opening the account. Had it done so, it would have seen that WealthTek was not permitted by the FCA to hold client money,” the FCA said.
Barclays has agreed to make a £6.3mn payment to WealthTek’s clients, who have not been able to reclaim all the money they lost, the regulator said.
The findings are an embarrassing blow for Barclays as the high-profile collapse of WealthTek has been described by the FCA as “one of the most serious and largest frauds we have ever investigated”.
The watchdog has brought criminal charges against John Dance, accusing the former WealthTek boss of using £64mn of client funds taken from his wealth management firm to finance the purchase of prizewinning racehorses and a Newcastle nightclub.
Dance pleaded not guilty in February to three counts of fraud by abuse of position and three counts of fraud by false representation, and a trial has been set for September 2027.
In the second case, the FCA said Barclays provided banking services to Stunt & Co, which went on to receive £46.8mn from Fowler Oldfield, “a multimillion-pound money laundering operation”.
Stunt & Co is the firm of James Stunt, Ecclestone’s former son-in-law. He was cleared of criminal charges in a jury trial earlier this year. Jurors were told that Stunt had started a joint venture with Fowler Oldfield, which prosecutors described as a “gateway” for criminals. Two Fowler Oldfield directors were convicted of money laundering.
The watchdog said Barclays had designated its relationship with Stunt & Co as “low risk” in 2015, failing to gather information on the nature of the business, the source of its wealth and funds and to assess the money laundering risks appropriately.
NatWest was also drawn into the scandal. It was fined almost £265mn in 2021 after the lender admitted breaching anti-money laundering rules and failing to prevent the money laundering scheme.
Despite being told by police in 2016 that the offices of Stunt & Co and Fowler Oldfield had been raided — with 12 being arrested at the latter’s premises — Barclays did not increase the risk rating of James Stunt or his corporate accounts, the FCA said. The police also noted the “close link” between Stunt & Co and Fowler Oldfield.
The FCA said: “By providing ongoing banking services to Stunt & Co, Barclays facilitated the movement of funds linked to financial crime.”
Barclays closed Stunt & Co’s accounts in 2020 but only undertook a significant investigation into Stunt & Co after it learned that NatWest was being charged for its association with Fowler Oldfield, the FCA found.
The FCA has previously fined Barclays over failings in financial crime controls. In 2015, the bank paid £72mn over an attempted transaction so large it was labelled an “elephant deal” by Barclays staff, and which was linked to high-profile Qatari clients, the Financial Times previously reported. Then in 2022, Barclays was fined over its relationship with the failed payments company Premier FX.
The FCA said Barclays “continues to engage and invest in a significant remediation programme” to improve its anti-money laundering control framework.
Barclays said it “remains deeply committed to the fight against financial crime and fraud”. It added that the investigation into Stunt & Co “was centred around historical money laundering activity” and did not find that Barclays had breached money laundering regulations.
The bank said it co-operated with the investigations and “and has further strengthened its financial crime and other control capabilities”.
This article has been amended since publication to clarify that Barclays closed Stunt & Co’s accounts in 2020.