Barclays fined by UK, US regulators for asset management lapses

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LONDON — U.K. regulators fined Barclays Bank Plc, Britain's second-biggest bank, a record 37.7 million pounds ($62 million) for failing to properly protect client assets.

The Financial Conduct Authority said Tuesday that the penalty was the largest ever for such violations and reflected significant weakness in the systems and controls at Barclays' investment banking division between November 2007 and January 2012.

Tracey McDermott, FCA director of enforcement and financial crime, says Barclays "failed to apply the lessons from our previous enforcement actions, numerous industry-wide warnings, and exposed its clients to unnecessary risk."

Barclays said it has already corrected the problems, which it had discovered and voluntarily reported.

Separately in the U.S., the Securities and Exchange Commission announced that Barclays has agreed to pay a $15 million penalty and take corrective actions to settle charges that legal controls in its wealth management business were inadequate.

The SEC said Barclays failed to expand its compliance procedures to handle the investment adviser business it acquired from the failed Lehman Brothers in September 2008.

Barclays neither admitted nor denied the allegations in the settlement. It agreed to hire an independent consultant to monitor compliance with securities laws and to refrain from future violations of the securities laws. The SEC also censured Barclays. Censure brings the possibility of a stiffer sanction if the alleged violation is repeated.

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