Law-breaking: Barclays (NYSE:BCS) and UBS (NYSE:UBS) need to take more responsibility

There have been many occasions where different institutes have gone under the radar for their participation in questionable acts. Banks are no exception and have come under attack by the media and clients. It has been noted that Barclays (NYSE:BCS) and UBS (NYSE:UBS) are regular offenders and have been fined several times for violating regulations.

Barclays (NYSE:BCS) has yet again failed to distinguish between clients’ money from its own. This has happened in the past where Barclays (NYSE:BCS) was asked to pay £1.1 million in damages. Barclays (NYSE:BCS) has been fined yet again, this time with a whopping figure of £38 million for the same offence. The figure would have been 30% more than the damages paid this time, had Barclays (NYSE:BCS) not cooperated; according to Financial Conduct Authority (FCA).

Tracy McDermott, the FCA’s Director of Enforcement and Financial Crime states that Barclays (NYSE:BCS) has not learned from its past misdemeanors and has put their clients at unnecessary risk. She has been quite firm in establishing that there will be no leniency for putting client assets at risk. She recalled Lehman Brothers (OTCMKTS:LEHMQ), who declared bankruptcy in 2008, after a similar incident

The amount of fine may seem insignificant to a bank the size of Barclays (NYSE:BCS), however, the firm action from FCA has motivated them to add safety measures to their IT system. It remains to be seen whether the updates will enhance client safety.

Other banks, such as JP Morgan (NYSE:JPM) and MF Global (OTCMKTS: MFGLQ) have also been accused of such practices. MF Global UK declared bankruptcy after a series of liquidity issues and penalty fines, which began from 2008 and led to their winding up in 2010.

JP Morgan (NYSE:JPM) was by the Financial Services Authority fined $48.2 million for failing to segregate its own assets from that of its clients. The FSA’s rules state quite clearly that firms must keep client capital in separate accounts for safety purposes, in case of the firm going bankrupt. Since their misconduct was not deliberate, they received a 30% discount on the fine.

The most recent bank to hit headlines is the UBS (NYSE:UBS) that is being tried by the French court for suspected money laundering and tax evasion. They have been ordered to pay a fine of €1.1bn by the French Court. The amount includes 40 percent of 2013 net income and half of that amount is alleged to have been laundered. UBS (NYSE:UBS) appealed against the charges, however, their appeal was dismissed and the original decision was withheld. The bank has filed further appeals to the French Supreme Court and the European Court of Justice.

Credit Suisse (NYSE:CS), was fined $2.6bn by the US Justice Department for similar offence. But the key difference between both cases is that, Credit Suisse (NYSE:CS) pleaded guilty while UBS (NYSE:UBS) did not. The French do not have a history of strict punishment regarding tax evasion and UBS (NYSE:UBS) may get lucky this time. However, had the UBS (NYSE:UBS) been under the US, it may have accepted the charges against it and paid up the fine since the laws are firmer here.