The FCA has fined Barclays Bank UK PLC £3,093,600 due to AML failures on its client, WealthTek.

1. Final Notice 2025: Barclays Bank UK plc  https://www.fca.org.uk/publication/final-notices/barclays-bank-uk-plc-2025.pdf
2. 1. For the reasons given in this Final Notice, the Authority hereby imposes on Barclays Bank UK PLC (“Barclays UK”) a financial penalty of £3,093,600 according to section 206 of the Act.   
   2. Barclays UK agreed to resolve this matter and qualified for a 30% (stage 1) discount under the Authority’s executive settlement procedures. Were it not for this discount, the Authority would have imposed a financial penalty of £4,419,500 on Barclays UK.
   3. Barclays UK has agreed to make a voluntary ex gratia payment of £6,281,757 to be distributed among WealthTek LLP’s (“WealthTek”) clients according to the Distribution Plan of WealthTek’s Joint Special Administrators. In the first case, Barclays Bank UK PLC was fined £3,093,600, reduced from £4,419,500 following early settlement.

Summary of Money Laundering Risks and Red Flags in the FCA Judgment Against Barclays Bank UK PLC

• The Financial Conduct Authority (FCA) issued a Final Notice to Barclays Bank UK PLC (Barclays UK) on 14 July 2025, imposing a financial penalty of £3,093,600 (after a 30% settlement discount) for breaches of Principle 3 and SYSC 6.1.1R of the FCA’s Handbook.
• The breaches relate to deficiencies in Barclays UK’s customer due diligence (CDD) processes for opening client money accounts, particularly in the case of WealthTek LLP’s Client Account, during the Relevant Period (January 1, 2021, to April 4, 2023).

Below is a summary of the money laundering risks and red flags identified in the judgment.

• https://www.fca.org.uk/publication/final-notices/barclays-bank-uk-plc-2025.pdf

Money Laundering Risks

1. Inadequate CDD for Client Money Accounts:
• Risk: Barclays UK failed to gather sufficient CDD information for WealthTek’s Client Account, including the purpose of the account, the types of clients whose funds were held, the levels of assets deposited, and the size and nature of transactions. This lack of due diligence increased the risk of misappropriation of client money and money laundering (paragraphs 2.5, 4.30).
• Impact: Without robust CDD, Barclays UK could not ensure that the Client Account was not used to facilitate financial crime, such as money laundering or terrorist financing, posing a threat to market integrity and consumer protection (paragraph 2.3).
2. Failure to Verify Regulatory Permissions:
• Risk: Barclays UK did not check the FCA’s Financial Services Register (FS Register) to confirm whether WealthTek was permitted to hold client money. WealthTek was subject to a Part 4A restriction prohibiting it from holding client money, which Barclays UK overlooked (paragraphs 2.7, 4.28).
• Impact: This allowed WealthTek to operate a Client Account that received over £34 million in client funds, which it was not authorised to hold, creating a significant risk of financial crime (paragraphs 2.11, 4.31).
3. Systemic Weaknesses in Account Opening Procedures:
• Risk: Until September 2021, Barclays UK’s procedures relied solely on checking internal Barclays Industry Classification (BIC) Codes to determine eligibility for opening client money accounts, without additional CDD or verification against the FS Register (paragraphs 2.6, 4.22–4.27).
• Impact: These systemic deficiencies exposed Barclays UK to the risk of facilitating financial crime across multiple client accounts, as inadequate controls failed to identify high-risk customers or activities (paragraphs 2.13, 6.8).
4. Risks Associated with Pooled Client Accounts:
• Risk: Pooled Client Accounts (PCAs), such as WealthTek’s Client Account, carry inherent risks, including:
• Clients of the account holder misusing the account for money laundering or terrorist financing without the account holder’s knowledge; and
• The account holder being complicit in money laundering, either willingly or under duress (paragraph 3.7).
• Impact: Barclays UK’s failure to establish the purpose of the PCA, the types of clients involved, and the nature of transactions increased the likelihood of these risks materialising (paragraph 3.8).
5. Delayed Remediation:
• Risk: Although Barclays UK identified deficiencies in its CDD processes in 2020 and initiated the CPA Project, it did not require checks against the FS Register until May 2022. WealthTek’s Client Account remained open until April 2023, despite remediation efforts starting in July 2022 (paragraphs 2.9, 2.10, 4.47–4.49).
• Impact: The prolonged delay in addressing these issues allowed WealthTek to continue operating an unauthorised Client Account, increasing the exposure to financial crime risks over the Relevant Period (paragraph 2.11).

Red Flags

1. Lack of Verification Against FS Register:
• Barclays UK did not review the FS Register to confirm WealthTek’s permissions, missing the explicit restriction on holding client money (paragraphs 2.7, 4.28). This was a critical oversight, as the restriction was visible on the FS Register.
2. Inadequate CDD Information:
• No information was gathered on the purpose of WealthTek’s Client Account, the types of clients whose funds were held, or the expected transaction patterns (paragraphs 2.5, 4.30). This lack of KYC data is a red flag for potential account misuse.
3. Reliance on BIC Codes:
• Barclays UK’s sole reliance on internal BIC Codes to determine eligibility for client money accounts, without additional due diligence, was a red flag for inadequate risk assessment (paragraphs 2.6, 4.22–4.24).
4. WealthTek’s Request to Open a Client Account:
• WealthTek’s request to open a Client Account, coupled with a change in its BIC Code to reflect fund management activities, should have prompted further scrutiny, especially given its regulatory status (paragraph 4.29).
• The failure to verify this change against the FS Register was a missed opportunity to identify a potential issue.
5. High Volume of Funds in Unauthorised Account:
• Over £34 million was deposited into WealthTek’s Client Account, despite its prohibition from holding client money (paragraphs 2.11, 4.31).
• The significant volume of funds processed without proper oversight is a major red flag for potential money laundering.
6. Delayed Response to Remediation:
• WealthTek’s failure to complete the AML Questionnaire promptly during the remediation process (July 2022–July 2023) was a red flag that should have escalated scrutiny of the account’s activities (paragraph 4.48).

Key Points and Implications

• Penalty and Context: Barclays UK was fined for failing to implement adequate CDD and AML controls, particularly for WealthTek’s Client Account, which led to a significant risk of financial crime due to unauthorised funds being held (paragraphs 2.14, 6.27).
• Regulatory Failures: The breaches of Principle 3 (responsible organisation and control) and SYSC 6.1.1R (adequate policies to prevent financial crime) underscore the importance of robust AML systems (paragraph 5.2).
• Proactive Steps by Barclays: Barclays UK identified and reported its shortcomings in 2020, initiating the CPA Project to improve procedures, but delays in implementation prolonged the risk exposure (paragraphs 2.9, 4.33–4.36).
• Consumer and Market Risk: The failures risked significant consumer losses and undermined market integrity, as £34 million in client funds were improperly handled (paragraphs 6.6, 6.8).

This summary encapsulates the key money laundering risks and red flags outlined in the FCA’s judgment, highlighting systemic and procedural failures in Barclays UK’s client account management processes.

Source

• https://www.fca.org.uk/publication/final-notices/barclays-bank-uk-plc-2025.pdf
• https://www.comsuregroup.com/news/barclays-fined-42-million-for-banking-dirty-money-associated-with-fowler-oldfield-wealthtek/