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Barclays may face fresh multi-million client segregation fine

Barclays may face fresh multi-million client segregation fine

Barclays is facing what could be its biggest ever regulatory penalty over client segregation failures, sources close to the discussions have reportedly told Bloomberg.

The sources said the eventual settlement could be larger than the near-£60 million the bank was fined by the Financial Conduct Authority over its manipulation of Libor rates, they added.

If correct, it would be the second time the bank has been penalised in recent years for failure to correctly segregate client funds. Barclays Capital was fined £1.1 million in 2011 for putting as much as £752 million of client money market deposits at risk over an eight-year period up to 2009.

The largest client segregation penalty in the UK previously was the £33.3 million that JP Morgan paid to the Financial Services Authority in 2010 after up to £15.6 billion was put at risk.

Barclays raised eyebrows this week with the documentation of a new debt issue, which listed 16 pages of upcoming regulatory and criminal investigations in the bank’s activity around the world.

A fresh multi-million pound charge would cast a further shadow over chief executive Antony Jenkins’ 18-month-old mission to shake up the bank’s internal culture.

Wall Street research firm Sanford C. Bernstein has estimated that the bank already faces £900 million in penalties this year to settle charges it misled investors in its ‘dark pool’ off-market exchange and manipulated currency markets.

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