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In a regulatory reprimand that lands like an overdue audit, the Financial Industry Regulatory Authority has fined Barclays’ broker-dealer unit $325,000, accusing the firm of letting a mountain of compliance work pile up during the chaos of the COVID-19 pandemic.

Backlog Buried Under Pandemic Disruptions

According to a Tuesday acceptance, waiver and consent letter, Barclays Capital Inc. failed to collect or timely review roughly 8,200 account statements tied to nearly 700 employee outside brokerage accounts from July 2021 to June 2022.

As the backlog grew, FINRA says 161 trades slipped through without mandatory pre-clearance — trades that should have been screened for potential conflicts of interest or insider-trading risks.

The regulator said the logjam formed after Barclays’ offices shut down in March 2020, triggering “delays and organizational changes” that left the firm struggling to monitor employee trading activity. For more than two years, the missing paperwork accumulated like snowdrifts in a winter storm with no plows in sight.

Supervisory Rules and a Two-Track Review System

Barclays’ supervisory framework required staff to report and receive approval for any outside accounts and certain trades. Normally, 93% of these accounts fed data directly to Barclays through electronic transmissions, enabling automated reviews.

But the other 7% depended on old-school paper statements mailed to Barclays — a system that buckled when pandemic disruptions shuttered offices and halted mail processing.

FINRA noted that the firm overhauled its review system in June 2022 and has since completed a full remedial examination of the backlogged statements.

A Pattern of Supervision Lapses

Tuesday’s penalty follows a $700,000 censure and fine issued last year for weaknesses in Barclays’ controls over research analyst trading — another violation of supervisory rules. The latest sanction reinforces FINRA’s message: even global financial giants cannot rely on outdated systems when regulatory obligations stay firmly in force.