By Huw Jones
LONDON -Barclays has been fined 783,800 pounds ($1.05 million) for failings in scrutinising collapsed payments firm Premier FX, whose customers the bank will pay 10 million pounds in compensation, Britain's financial watchdog said on Monday.
Barclays was Premier FX's sole banker in Britain, and when the company collapsed in August 2018, 167 customers were left with losses totalling a little more than 10 million pounds.
The settlement means that the customers, many of whom were British citizens living in Spain and Portugal who had used Premier to transfer money from the UK, have got all their cash back, the FCA said.
Barclays was required to check regularly that Premier FX complied with rules to prevent money-laundering.
"Barclays failed to make enquiries to ensure that Premier FX’s actual business activity aligned with Barclays’ expectations and did not identify that Premier FX’s internal controls were deficient," the Financial Conduct Authority said in a statement.
"This constituted a failure by Barclays to conduct its business with due skill, care and diligence."
Barclays said it had reached a resolution with the FCA. "Barclays fully cooperated with the FCA's investigation," the bank said in a statement.
The FCA said the fine takes into account that Barclays has agreed to cover the losses of Premier FX customers, whose claims have been accepted by Premier FX’s liquidators.
The fine ends the FCA's investigation into Premier FX and associated parties, the watchdog said.
FCA censured Premier FX in February last year for failing to safeguard its customers' money and for misuse of its payments accounts.
Barclays’ agreement to meet the deficiency in Premier FX’s funds mitigates the actual losses to Premier FX’s customers, said Mark Steward, the FCA's executive director for enforcement.
"This is a significant step to the credit of the bank and has reduced substantially the sanction that otherwise would have been imposed," Steward said.
($1 = 0.7475 pounds)
