FCA fines Metro Bank £16 million for financial crime failings

Metro Bank automated the monitoring of customer transactions for potential financial crime in June 2016. However, its system didn’t work as intended. An error in terms of how data was fed into the system meant transactions taking place on the same day that an account was opened, while any further transactions until the account record was updated were not monitored.  

Junior members of staff did raise concerns about some transaction data not being monitored in 2017 and 2018, but these did not result in the issue being identified and fixed. Even once a fix had been put in place in July 2019, Metro Bank did not have a mechanism to consistently check that all relevant transactions were being fed into the monitoring system until December 2020 (ie over four-and-a-half years after the system was implemented).  

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, commented: “Metro Bank’s failings risked a gap being left in our defence against the criminal misuse of our financial system. Those failings went on for too long.”

Since the firm’s identification of the issues with its transaction monitoring system in April 2019, Metro Bank has put in place processes to remediate the issues identified.

Metro Bank breached Principle 3 of the FCA’s Principles for Businesses, which is focused on management and control. The organisation would have been fined £23,821,700, but agreed to resolve these matters and so qualified for a 30% discount under the FCA’s processes.

As such, the FCA has fined Metro Bank plc the sum of £16,675,200.

For its part, the FCA continues to supervise firms to ensure that they have the right systems and controls to manage financial crime risks.

Barclays fined £40 million

The FCA has fined Barclays £40 million in total for the latter’s failure to disclose certain arrangements with Qatari entities in 2008.

This follows on from Barclays’ decision to withdraw its referral of the FCA’s planned action to the Upper Tribunal. The action was based on findings which included that Barclays’ conduct in its October 2008 capital raising was reckless and lacked integrity. The FCA notes Barclays’ statement on this matter.

The FCA first issued warning notices against Barclays in 2013. The case was paused pending criminal proceedings brought by the Serious Fraud Office. It was restarted following the dismissal of proceedings against Barclays and the acquittal of the other parties.

The FCA published decision notices setting out its case against Barclays in October 2022 and Barclays chose to refer the case to the Upper Tribunal, which is independent from the FCA and hears appeals against enforcement cases. The FCA had previously decided to impose a fine of £50 million in total.

National importance

The events in 2008 were of national importance as banks sought emergency recapitalisation. The FCA has a primary objective to ensure market integrity. Banks should treat their obligations to the market and shareholders seriously.

The FCA welcomes the decision by Barclays to withdraw the reference of this case to the Upper Tribunal. The FCA recognises that this case concerns disclosure decisions made in the context of very large and complex capital raisings that took place many years ago under considerable market pressure.

Steve Smart, joint executive director of enforcement and market oversight at the FCA, explained: “Barclays’ misconduct was serious and meant investors did not have all the information they should have had. However, the events took place over 16 years ago and we recognise that Barclays is a very different organisation today, having implemented change across the business. It’s very important that listed firms provide investors with the information they need.”