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What
did Barclays Bank do that angers the Federal Reserve Board (FRB) so much it handed
a "cease and desist order"
and levied a $298 million fine on the British bank and its New York branch?
It must be some dealing with Iran, North Korea or somebody closely affiliated
with the US' enemies, according to this Fed release from late Wednesday:
The
Federal Reserve Board and the New York State Banking Department on Wednesday
announced the issuance of a consent Order to Cease and Desist against
Barclays Bank PLC, London and the bank's branch in New York. The Order
requires Barclays Bank to improve its program for compliance with U.S.
economic sanctions requirements on a global basis.
While
it is most interesting that a US regulatory authority can levy a fine on a
British bank entity outside of the USA, the move was actually assisted by the
UK's Financial Services Authority (FSA), the Fed said further:
The
United Kingdom's Financial Services Authority, the home country supervisor of
Barclays Bank, has agreed to assist the Federal Reserve in the implementation
and supervision of the Order.
A fine
of 2 times $149 million is a little more than just a slap on the wrist. The
move involves several American punishment institutions:
In
separate, coordinated actions, the U.S. Department of Justice and the District
Attorney for New York County announced the execution of deferred
prosecution agreements with Barclays Bank, and the Treasury Department's
Office of Foreign Assets Control announced a settlement for violations of
its regulations. The settlement agreements all relate to U.S. dollar payments
routed through banks in the United States that involved entities or persons
subject to U.S. economic sanctions. In the settlements with the Department of
Justice and the District Attorney, Barclays Bank has agreed to pay $149
million, each, to the United States and to New York, for a total of $298
million. A
copy of the Order is attached.
A link to a PDF copy leads
to a blank page only.
The field is wide open for speculation remembering that Wachovia was fined $160 million for
laundering $378 billion for Mexican drug cartels (or
1/3 of Mexco's GDP!!!) in March 2010.
Comparing these fines/settlements Barclays wrongdoings may have involved
similar sums as I don't want to presume that US authorities apply two scales
of justice.
Barclays
was down 1.2% in early London trading.
Toni Straka
Editor, the Prudent Investor
Toni Straka is an
INDEPENDENT Certified Financial Analyst (OeVFA, EFFAS) who worked as a
financial journalist for 15+ years and now evaluates global market trends.
Analyzing financial and political news permanently he wants to share his
insight with those who understand that we are in an era of global
redistribution of wealth. The US-European centric approach does not work
anymore. Five billion people in the developing countries now demand their
fair share of the world's resources.
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