The Financial Conduct Authority (FCA) has fined Barclays Bank plc (Barclays) £26,033,500 for failing to adequately manage conflicts of interest between itself and its customers as well as systems and controls failings, in relation to the Gold Fixing. These failures continued from 2004 to 2013.It seems to have been a rogue trader, one Daniel Plunkett, who rigged the 3 pm Gold Fixing to avoid making a payment to a customer. He has been fined as well and struck off by the FCA.
But the timing is exquisite. The very day after Barclays was censured by the FCA for rigging Libor and Euribor, Plunkett rigged the gold fixing in his favour. Clearly nothing had been learned from the FCA's enforcement action. This is worrying, given the high profile of the FCA's investigation into Libor-rigging at Barclays, and the fact that it cost the bank its CEO as well as regulatory fines and untold reputational damage.
It's also implied in the FCA's notice that although Plunkett's misconduct is recent, Barclays' systems and controls around its participation in the Gold Fixing have been inadequate for a very long time. It seems likely therefore that Barclays traders have routinely rigged the Gold Fixing.
Although the specific incident referred to by the FCA occurred in 2012, the fact that failures continued into 2013 is of course highly embarrassing for Anthony Jenkins, who is trying desperately to clean up the bank's image. Clearly he didn't act fast enough to address systems and control failures on the trading floor.
Barclays is the first bank to be fined for rigging the Gold Fixing. But I doubt if it will be the last. The other banks involved in the Gold Fixing, namely Scotiabank, Societe Generale and HSBC - and Deutsche Bank, although it has now exited the Gold Fixing - are under investigation for the same thing. It's evident that price rigging has been common practice across all markets, so it seems unlikely that Barclays will be the only offender, and it may not even be the worst.
And roll on the next scandal, too. Fraud, price fixing and ripping off customers seem to be endemic not only on trading floors, but in retail banks and even private banks. It seems that we are gradually dismantling the entire ethos of late 20th Century banking. I wonder what the eventual cost will be....
That Barclays Libor-rigging matter....