Watchdog to probe money laundering at Barclays

The financial watchdog has launched an investigation into Barclays’ anti-money laundering practices.

The Financial Conduct Authority (FCA) made the move last spring after noting the large number of suspected money laundering incidents at the bank.

Barclays was issued a notice by the watchdog, demanding an independent review of its systems to prevent and detect financial crime. The process is known as a Section 166 – or skilled person review – and usually involves an external accountancy or law firm investigating and producing a report with recommendations for improvements.

The review is part of the FCA’s supervisory powers, but can be referred to the watchdog’s enforcement division if wrongdoing is suspected.

Launching its review, the FCA sent a Section 166 letter to Barclays’ UK boss Matt Hammerstein and chief operating officer Alistair Currie.

Probe: The financial watchdog has launched an investigation into Barclays’ anti-money laundering practices

The investigation, which emerged for the first time yesterday, has been running for a year and is still ongoing.

Britain’s authorities have in recent years tried to crack down on financial controls at the country’s top banks.

This comes amid widespread criticism that London has become one of the world’s biggest hubs for the movement of illicit funds. NatWest was fined £265m in December 2021 for failing to prevent the laundering of nearly £400m, in the first criminal money laundering case by regulators against a British bank.

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Gary Greenwood, analyst at Shore Capital, said: ‘The NatWest fine gives a sense of the size of any potential penalty that could come Barclays’ way. Yet again, it appears that Barclays may have stepped on a banana skin and this will add to the perception that it is somewhat accident prone.’ The FCA probe is the latest in a series of scandals to rock the London-based banking giant.

It is still reeling from the departure of Jes Staley, who quit as chief executive over his ties to convicted paedophile Jeffrey Epstein.

Staley handed over to Coimbatore Sundararajan Venkatakrishnan, known as Venkat, who is undergoing treatment for cancer.

In November the bank was branded ‘reckless and lacking integrity’ by the FCA as it was fined £50m over its secretive deals with Qatar to avoid a bail-out during the financial crisis.

Last April Barclays was accused by the Bank of England of ‘gaming the rules’ over pensions, using complex transactions involving its employees’ retirement funds to boost its capital cushion.

And in December 2021, HSBC, Barclays and NatWest were fined by the European Commission for their roles in a foreign currency trading cartel through a chatroom named ‘Sterling Lads’.

The FCA has promised a more aggressive approach on money laundering under chief executive Nikhil Rathi after a string of scandals. It has repeatedly warned banks doing business in the UK that their oversight and reporting systems are not up to scratch.

Barclays reports annual results next week. Investors will likely zero in on the performance of its investment bank amid a reshuffle of senior executives in recent weeks. The bank will also provide further details on any legal and regulatory cases it is involved in.

This post first appeared on Dailymail.co.uk