Investment bank Barclays Capital has been fined £1.1 million for failing to ring-fence client money in one of its accounts for more than eight years.
BarCap – headed at the time by Bob Diamond, who was appointed chief executive of parent group Barclays on January 1 – put millions of pounds of client cash at risk of potential loss, according to the Financial Services Authority (FSA).
The FSA said BarCap committed a “serious breach” of rules after it failed to segregate client cash in sterling money market deposits from its own funds for up to seven hours a day between December 1, 2001, and December 29, 2009.
Up to £752 million was held in the account at any one time, which would have been at risk if BarCap had gone bust.
The fine follows a £33.3 million FSA charge on fellow investment bank JP Morgan last June for a similar offence.