The Financial Conduct Authority (FCA) is said to be preparing to announce the fine – a record for this kind of offence – as soon as today.
The punishment relates to the bank’s failure to segregate clients’ assets properly and maintain adequate records. It would be the second time Barclays has been fined for such an offence after a £1.1m penalty three years ago.
The FCA is understood to have concluded that a much more severe penalty is necessary in order to serve as a deterrent to other firms which continue to demonstrate inadequate controls over clients’ assets.
Insiders told Sky News on Monday that the regulator’s announcement would make clear that losses for Barclays’ clients were theoretical rather than actual, but nonetheless serious.
The latest offences relate to multiple failings in Barclays’ investment banking division over a five-year period between 2007 and 2012, prior to the appointment of Antony Jenkins as the bank’s group chief executive.
Jenkins has since attempted to instigate a serious clean-up of the bank, which has already been fined for numerous activities including its involvement in rigging Libor, and the sale of payment protection insurance that all UK banks have been punished for.
The UK’s most popular fund manager, Neil Woodford, recently noted his fear over owning bank shares now, given what he calls the risk of fine inflation.
Woodford said earlier this month: “In recent weeks I have started to become more concerned about one particular risk: that of ‘fine inflation’ in the banking industry.
“The size of any potential fine is unquantifiable, so this represents an unquantifiable risk.