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Barclays fined £26m over gold price fix

by David Campbell on May 23, 2014 at 09:15

Barclays fined £26m over gold price fix

Barclays Bank faces a £26 million fine after regulators found the bank had failed to adequately manage conflicts of interest in daily gold price fixing over a period of almost 10 years.

The Financial Conduct Authority (FCA) also banned and fined former Barclays trader Daniel James Plunkett who ‘exploited the weaknesses’ in the company’s system to influence the price fixing.

His actions allowed the bank to avoid making a $3.9 million (£2.31 million) payment to a customer the FCA found, while boosting Plunkett’s trading book by $1.75 million.

‘A firm’s lack of controls and a trader’s disregard for a customer’s interests have allowed the financial services industry’s reputation to be sullied again,’ said FCA head of enforcement Tracey McDermott.   

‘Plunkett has paid a heavy price for putting his own interests above the integrity of the market and Barclays’ customer. Traders who might be tempted to exploit their clients for a quick buck should be in no doubt - such behaviour will cost you your reputation and your livelihood.’

The fine related from when Barclays joined the daily gold price fixing call in 2004 up to 2013.

Plunkett, who was a director on the bank’s precious metals desk, has been fined £95,600, in addition to being banned from regulated activity.

The FCA found that he had deliberately placed orders at the lower end of the bid spectrum in order to avoid having to pay out to a customer who held Barclays-issued gold option contracts.   

Both Barclays and Plunkett agreed to settle at an early stage and so qualified for a 30% discount on fines which would otherwise have totalled £37.19 million and £136,000 respectively.

1 comment so far. Why not have your say?


May 23, 2014 at 09:41

The London Gold Fix is clearly in turmoil. Deutsche have left & now it seems Barclays might follow after the FCA fine & ruling. Gold and its market was once outside the bounds of old FSA judgmentalism but now it seems there is nothing sacred in the financial world. The reasons for the traders actions, departure and subsequent ban are just too thin to comment further but this episode is just another sequel to market destruction through heavy regulatory measures. Whether the Fix survives is probably more to do with the technical mechanics of the London fixing process and its significance hereon rather than how the LGMA feels about regulatory hurdles. If other gold dealers such as Degussa Sharps don't join in on the fixing process then I suspect the Fix will disappear or fragment beyond repair.

Another sad episode in the City of London.

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