Barclays Reveals Client Names To German Finance Agency

Barclays, the U.K. investment bank, has reportedly revealed the names of clients as well as trading information to the German Finance Agency by accident.

According to a news report in Bloomberg, the accident happened earlier in 2017, with the bank saying in an email to the impacted customers last week that it was due to human effort. The data breach occurred when Barclays inadvertently sent the wrong file to the German Finance Agency in February, Bloomberg reported, citing people briefed on the matter.

The trade data is sent to the agency each month, but the information about the clients is supposed to be kept secret, noted the report. Alexandra Beust, chief spokeswoman for the German agency, told Bloomberg the data breach happened and said it alerted the U.K. bank immediately. Barclays then deleted the data.

A spokesman for Barclays in London declined to comment to Bloomberg. The bank has vowed to invest billions of pounds to automate and digitize the bank’s processes in an effort to slash costs, reduce the likelihood of human error in data privacy and to make it more difficult for any market-rigging scandals to happen.

The mistake is seen as a blow to Barclay’s customer service reputation, given the importance of client confidentiality in the investment and trading markets.

And yet, this isn’t the first time the bank has been in trouble due to compliance issues in 2017. Earlier in the year, Chief Executive Officer Jes Staley was forced to apologize to its shareholders after trying to uncover the identity of a whistleblower, which runs afoul of the bank’s rule about guaranteeing anonymity, reported Bloomberg. The CEO and other executives are being interviewed by the U.K. Financial Conduct Authority and could face fines or even the loss of their jobs, noted the report.

In May, the U.S. Securities and Exchange Commission (SEC) announced an enforcement action against Barclays Capital. The SEC found that two of Barclay’s advisory programs charged some 2,000 clients fees for various tasks — including due diligence and monitoring of third-party investment managers — that they did not perform. The net result was that Barclays overbilled clients by some $50 million.