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Barclays hit by $361m fine from US regulators over trading blunder

By Nagasunder in UK Business News, posted October 4, 2022

US regulators have fined Barclays $361 million (£327.3 million) after it exceeded a limit on the sale of complex financial products.

The Securities and Exchange Commission says the London-based bank sold $17.7 billion in more structured products and exchange-traded notes than it had received regulatory approval for.

In March 2018, the bank was granted permission to sell $21.3 billion in relevant financial securities over an 18-month period.

However, the bank only discovered the problem in March of this year.

Barclays reported the problem to the SEC just days later, admitting that the bank did not have adequate controls to monitor the sale of the products.

Gurbir Grewal, director of the SEC’s Division of Enforcement, said "While we acknowledge Barclays’ efforts to identify, disclose and remediate this conduct, the control deficiencies and the scope of the conduct at issue here was simply staggering,"

After initially rising in the United Kingdom, the bank's shares fell 1.4 percent to 142.64 in the early afternoon.

According to the SEC, Barclays was ordered to pay $200 million in civil penalties for the control lapses, as well as $161 million in disgorgement and interest.

However, the regulator stated that the latter charge could be offset by the bank's offer to buy back securities from investors that it had sold in excess of its regulatory limit.

In July, the bank set aside £1.3 billion to cover the error, reducing adjusted profits by nearly a quarter to £3.7 billion.

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The SEC fine begins to put an end to an issue that has been a major distraction for the firm's CEO, C S Venkatakrishnan, also known as Venkat, who has been in the top job for less than a year.

A request for comment was not returned by Barclays.

Source: Evening Standard

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