Barclays has agreed a $361m fine from the US Securities & Exchange Commission for a trading oversight errors that led it to sell more of a specific type of financial product than it was regulated to. (Tim Goode/PA)
(Picture: PA Wire)Barclays has been fined $361 million (£327.3 million) by US regulators after it breached a limit on the sale of complex financial products.
The Securities & Exchange Commission said that the London-listed bank had sold $17.7 billion more structured products and exchange traded notes than it had secured regulatory permission for.
The bank had been granted permission in March 2018 to sell $21.3 billion of the relevant financial securities for a period of 18 months, but it was only in March this year when the bank discovered the issue.
Barclays reported the problem to the SEC just days later, acknowledging that, according to the SEC, the bank did not have sufficient controls to monitor the sale of the products.
"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," Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement to Reuters.
After initially rising in the UK, the bank’s shares dropped by roughly 1.4% to 142.64 in the early afternoon.
The SEC said that Barclays had been ordered to pay $200 million in civil penalties for the control lapses, while it had also been ordered to pay around $161 million in disgorgement and interest.
However, the regulator said the latter charge could be cancelled out by the bank’s offer to buyback from investors the securities that it had sold beyond its regulatory limit.
In July, the bank put aside £1.3 billion to cover for the error, a move which led to its adjusted profits dropping bynearly a quarter to £3.7 billion.
The fine by the SEC begins to draw a line under the issue, which has been a significant distraction for the firm’s chief executive, C S Venkatakrishnan, known as Venkat, who has still been in the top job less than a year.
Barclays did not respond to a request for comment.
