Barclays Fined By UK, US Regulators

(RTTNews) - British lender Barclays plc (BCS, BARC.L) on Tuesday was fined 37.7 million pounds or $61.7 million by U.K. Financial Conduct Authority for failing to safeguard client assets, and $15 million by The Securities and Exchange Commission or SEC for compliance failure.

According to the FCA, around 16.5 billion pounds in client assets were at risk between November 2007 and January 2012 due to weak arrangements between the bank and external custodians it contracted with to handle client trades and settlement.

Meanwhile, the SEC charged Barclays Capital Inc. with failing to maintain an adequate internal compliance system to ensure the firm did not run afoul of any federal securities laws after its wealth management business in the U.S. acquired the advisory business of Lehman Brothers in September 2008.

To settle the SEC's case, Barclays agreed to pay $15 million penalty and to undertake remedial measures, including engaging an independent compliance consultant to conduct an internal review.

Julie Riewe, Co-Chief of the SEC Enforcement Division's Asset Management Unit, said, "When a firm acquires an advisory business, it must devote the attention and resources necessary to build a robust compliance system. Barclays failed to establish this critical compliance foundation when it acquired Lehman's advisory business, and as a result subjected its clients to a host of improper practices and inadequate disclosures."

According to the SEC's order instituting a settled administrative proceeding, Barclays failed to adopt and implement written policies and procedures and maintain certain required books and records to prevent the other violations.

On the NYSE, Barclays shares lost 1.05 percent on Tuesday, and settled at $15.10.