* Gold price manipulation took place a day after Libor fine
* Barclays is first bank fined over gold price fix
* All benchmarks under scrutiny, including precious metals
* Blow for Barclays' efforts to put past sins behind it
(Adds Plunkett email, details in paragraphs 9, 11, 16, 20, 25,
link to factbox)
By Steve Slater and Huw Jones
LONDON, May 23 Barclays Plc has been
fined 26 million pounds ($43.8 million) for failures in internal
controls that allowed a trader to manipulate the setting of gold
prices, just a day after the bank was fined for rigging Libor
interest rates in 2012.
Britain's Barclays is the first bank to be fined over
attempted manipulation of the 95-year-old London gold market
daily "fix", although a source familiar with the fine said it
was a one-off and not part of a wider investigation into gold
It marks another blow to Barclays' attempts to put past
problems behind it.
The Financial Conduct Authority said on Friday there were
failings at Barclays from 2004 until 2013, but the key event
occurred on June 28, 2012, a day after UK and U.S. regulators
fined it $450 million over attempted Libor rigging.
"A firm's lack of controls and a trader's disregard for a
customer's interests have allowed the financial services
industry's reputation to be sullied again," said Tracey
McDermott, the FCA's director of enforcement and financial
The FCA said it had banned former Barclays trader Daniel
James Plunkett and fined him 95,600 pounds for exploiting
weaknesses in the bank's systems.
"Plunkett's actions came the day after the publication of
our Libor and Euribor action against Barclays. The investigation
and outcomes in that case meant that the firm, and Plunkett,
were clearly on notice of the potential for conflicts of
interests around benchmarks," McDermott said.
Plunkett fixed the price in order to avoid the payment of
$3.9 million to a customer under an option, which boosted his
own trading book by $1.75 million, the FCA said. The bank later
compensated the client in full.
On the eve of June 28, Plunkett sent an email to commodities
colleagues saying that he was hoping for a "mini puke" the
following day. The FCA understood this to mean a drop in the
price of gold ahead of the fixing.
Plunkett was a director on the precious metals desk at
Barclays and was responsible for pricing products linked to the
price of precious metals and managing Barclays' risk exposure to
those products. The FCA said Plunkett gave the watchdog and
Barclays untruthful accounts of his trading activity.
Attempts by Reuters to locate and contact Plunkett online
were not immediately successful.
Barclays Chief Executive Antony Jenkins is attempting to
restore the bank's reputation after a series of scandals, but
the emergence of past sins are hampering his efforts. He has
said its culture, which has been criticised as high-risk,
high-reward, had to change and that systems and controls were
"We very much regret the situation that led to this
settlement ... these situations strengthen our resolve to
improve," Jenkins said in a statement on Friday.
The FCA said Barclays co-operated with the investigation,
which reduced its fine by 11 million pounds.
Barclays was the first bank to be fined for attempted
manipulation of Libor, although other banks have since been
Barclays' head of spot gold trading, Marc Booker, left the
bank earlier this month as part of the bank's restructuring and
its exit from the commodity business.
The Libor rigging scandal has put scrutiny on how all
benchmark prices are set, including London's gold "fix", which
dates back to 1919.
Banks arrive at the gold fix through matching buy and sell
orders during a twice-daily telephone call, which miners,
jewellers and central and commercial banks use to trade gold.
The 117-year old London silver price fix set by Deutsche
Bank, HSBC and Bank of Nova Scotia will cease in August, and
greater regulatory scrutiny is forcing major changes in how all
precious metals prices are set.
The London Bullion Market Association (LBMA) has launched
consultation on a possible alternative to the silver benchmark
into a legally watertight system that could then be applied to
the other precious metals fixes, sources said.
The FCA and several other regulators, including Bafin in
Germany and the U.S. Commodity Futures Trading Commission, have
indicated they also are looking at the gold fix.
In years gone by, seats at the gold and silver fixing tables
were a mark of distinction for a bank, but now most banks do not
want to be involved.
Four banks now set the gold price - HSBC, Societe
Generale, Bank of Nova Scotia and Barclays. A
former fifth member of the fix, Deutsche Bank,
resigned on May 12 without a replacement.
The FCA said it was checking with London Gold Market Fixing
Limited to see how it was complying with new global rules for
administering benchmarks that were brought in after the Libor
scandal began to unfold.
The LBMA and London Gold Market Fixing could not immediately
reached for comment.
($1 = 0.5931 British Pounds)
(Additional reporting by Clara Denina. Editing by Veronica
Brown and Jane Baird)