Barclays' data failings lead to £2.5m fine

Barclays Capitalhas been fined £2.45 million by the Financial Services Authority for inaccurately reporting nearly 60 million transactions.

The unit, which is the investment banking arm of Barclays, blamed “inaccuracies” in its data feeds to the FSA for the reporting failures.

The FSA pointed to “serious weaknesses in systems and controls”, after finding 85 percent of its share trades, and 100 percent of other trades were reported inaccurately.

Barclays Capital had failed to report 17 million transactions, and listed the wrong trading times for 24.6 million trades. For nearly four million trades, it did not state whether they were a buy or sell, further breaching FSA rules which are designed to prevent insider dealing.

The fine, billed as the largest of its kind, was the result of an investigation that began last year while the FSA was examining suspected market abuse by a third party.

The FSA said the fine would send a “warning” to other companies that their reporting must be accurate, and timely. Its rules stipulate that it must be informed of all trades within a day of their execution.

Barclays has now added a dedicated unit that will ensure its reporting processes and systems are right up to date. It said it had worked “in full co-operation with the FSA” during the investigation.

“The regulatory reporting errors were caused by inaccuracies in our data feeds to the FSA,” it said.

Alexander Justham, markets director at the FSA, told the Financial Times: “Barclays’ reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse.”

The FSA “will not tolerate inadequate systems and controls” in any financial business, he said.

Copyright © 2009 IDG Communications, Inc.

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