The Financial Conduct Authority fined Barclays £26 million ($43.9 million) after accusing a former trader at the bank of improperly influencing gold prices at the expense of a customer.
The FCA said in its final notice Friday that it had imposed the fine because Barclays did not adequately manage conflicts of interest between itself and its customers. The bank also failed to have some internal controls between 2004 and 2013.
The FCA also fined former Barclays trader Daniel James Plunkett £95,600 ($160,000) and barred him from participating in any regulated financial activities.
Plunkett settled with the agency, the FCA said. He had profited at the expense of a customer, who was later fully compensated by Barclays.
Plunkett’s improper conduct occurred on June 28, 2012 — the day after the FCA and U.S. authorities fined Barclays $450 million for improperly influencing global benchmark interest rates.
“A firm’s lack of controls and a trader’s disregard for a customer’s interests have allowed the financial services industry’s reputation to be sullied again,” said Tracey McDermott, the FCA director of enforcement and financial crime.
“Traders who might be tempted to exploit their clients for a quick buck should be in no doubt — such behavior will cost you your reputation and your livelihood,” McDermott said.
The FCA has been examining banks to determine if the way they set gold prices complies with new international standards in place for benchmarks since the LIBOR interest rate scandal.
In the case announced Friday, Barclays said it brought the improper conduct to the attention of the FCA’s predecessor agency after it learned of it in 2012, and fully cooperated with the investigation.
Antony P. Jenkins, Barclays’ chief executive, said: “We very much regret the situation that led to this settlement. Barclays has undertaken a significant amount of work to enhance our systems and controls and is committed to the highest standards across all of our operations.”
The fines against Barclays and Plunkett were reduced 30 percent because they agreed to cooperate at an early stage of the investigation, the FCA said.
The FCA’s May 23, 2014 Final Notice is here (in pdf).
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.