Barclays Capital fined £1.1m over client cash risk

Investment bank Barclays Capital was fined £1.1 million today for failing to ring-fence client money in one of its accounts for more than eight years.

BarCap, headed at the time by Bob Diamond who was appointed chief executive of parent group Barclays on January 1, put millions of pounds of client cash at risk of potential loss, according to the Financial Services Authority.

The FSA said BarCap committed a “serious breach” of rules after it failed to segregate client cash in sterling money market deposits from its own funds for up to seven hours a day between December 1, 2001, and December 29, 2009.

Up to £752 million was held in the account at any one time, which would have been at risk if BarCap had gone bust.

The fine follows a £33.3 million FSA charge on fellow investment bank JP Morgan last June for a similar offence.