Barclays Plc suffered a $44 million penalty for control glitches over fixing of gold prices, which took place one day after the UK lender was penalized $450 million for manipulating Libor interest rates.
Barclays is the first bank to be punished by means of a fine over attempt to fix market gold prices, although a source said the penalty was an isolated incidence as opposed to part of a broader probe into price rigging in the gold market, Reuters reported.
The latest developments are a major blow to Barclays as the bank tries to clear its reputation.
There were lapses at Barclays between 2004 and 2013, although the core event took place on June 28, 2012, the Financial Conduct Authority said.
The financial watchdog banned Barclays trader Daniel James Plunkett after he was found guilty of taking advantage of lapses in the lender’s systems.
Tracey McDermott of the FCA said that the lender’s failure to put controls in place and a trader’s inconsideration of customer’s interests have brought the financial industry into disrepute for yet another time.
“Plunkett’s actions came the day after the publication of our Libor and Euribor action against Barclays. The investigation and outcomes in that case meant that the firm, and Plunkett, were clearly on notice of the potential for conflicts of interests around benchmarks,” McDermott added.
Antony Jenkins, Barclays Group Chief Executive told Bloomberg that the bank has made substantial strides towards improving its systems and controls. He acknowledged there is much more room for improvement in order to accomplish a solid cultural change the bank launched at the outset of 2013, but insisted Barclays was much better today.
The process of price setting has been subject of scrutiny over the past six months, with dealers and analysts believing that information obtained from the fixing calls could put some traders at an advantage.
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