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Barclays fined record £284m for forex failings

Kit Klarenberg
Written By:
Kit Klarenberg
Posted:
Updated:
20/05/2015

The Financial Conduct Authority (FCA) has fined Barclays a record £284m for failing to control business practices in its London foreign exchange operations.

The £284,432,000 fine reflects the bank’s “inadequate and ineffective” control over its forex floor, the regulator said.

It is the largest financial penalty ever imposed by the FCA, or its predecessor the Financial Services Authority (FSA).

Barclays was found to have engaged in “collusive behaviour” in which its traders and those from other banks formed tight-knit groups to manipulate fix rates and ensure it sold a particular currency to clients at a higher rate from which it bought it to ensure maximum profit for Barclays.

Barclays was also fined $2.4bn (£1.6bn) today by the US Department of Justice for its stateside forex rigging activities.

Georgina Philippou, the FCA’s acting director of enforcement and market oversight, said: “This is another example of a firm allowing unacceptable practices to flourish on the trading floor. Instead of addressing the obvious risks associated with its business Barclays allowed a culture to develop which put the firm’s interests ahead of those of its clients and which undermined the reputation and integrity of the UK financial system.

“Firms should scrutinise their own systems and cultures to ensure that they make good on their promises to deliver change.”

Barclays and other firms are already participating in an industry-wide remediation programme to ensure that they address the root causes of the failings in their FX businesses and that they drive up standards.