Barclays ends 2013 with $3.75M fine for poor client record keeping


The bank failed to keep some instant messages from Bloomberg Terminals, FX fix investigations related?

On the second day of Christmas… FINRA settled with Barclays for systematically failing to keep proper records of emails and instant messages for 10 years. The company did not abide by securities laws that mandate companies to keep and protect their business-related digital data in a proper format. The regulations state explicitly that the company has to keep a WORM (Write-Once, Read-Many) format that prevents alterations.

The period that FINRA cites is between 2002 and 2012 – quite some time that went on unobserved and unseen by internal monitoring nor the law. We wonder whether this finding might be related to recent foreign exchange manipulation investigations – Barclays was one of the first mentioned in the ongoing probe by regulators worldwide.

Why else would authorities would be looking for this data? – The statement on FINRA’s website does not provide any details as to that, but it concludes that the bank failed to create and support an appropriate system for keeping records in compliance with SEC, NASD and FINRA’s regulatory requirements.

The information that Barclays failed to provide to regulators included order and trade tickets data, confirmation messages, account records, etc. All in all – some very sensitive information that could have been altered in any way an employee pleases. A pretty disturbing occurrence since it has been going on for 10 years – the bank itself was not able to determine whether the records in question have been kept in an unaltered state.

What makes us frown having in mind the foreign exchange manipulation investigation, is the part of FINRA’s statement that concludes that between 2007 and 2010 the bank failed to keep certain attachments to Bloomberg emails and lost track of approximately 3.3 million of those notoriously famous Bloomberg instant messages.

At the end we might never know that, Barclays might have spent way more money to be able to keep their data recording procedures in check. When compared to their recent fines this comes as a drop in the bucket as banks are racing to report their competitors about who was fixing FX rates more than the others.

For the full press release visit FINRA’s website.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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Barclays ends 2013 with $3.75M fine for poor client record keeping

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