LONDON-- Barclays PLC was on Thursday fined by British regulators over anti-money-laundering control failings linked to a secretive GBP1.88 billion ($2.83 billion) deal it arranged for a number of rich clients.

The Financial Conduct Authority fined Barclays GBP72 million for "failing to minimize risk" around a product it structured for clients between in 2011 and 2012.

The deal in question, which the FCA said didn't involve any financial crime, was never logged on a Barclays computer. It included a clause that offered to pay the clients up to GBP37.7 million if their names were ever disclosed. Documents related to the deals were locked in a specially bought safe that few staff knew existed.

"Barclays applied a lower level of due diligence than its policies required for other business relationships of a lower risk profile," the FCA said. The FCA said the clients were politically exposed persons and so should have been subject to higher levels of due diligence.

Barclays said: "The FCA made no finding that Barclays facilitated any financial crime in relation to the transaction or the clients on whose behalf it was executed." The bank made GBP52.3 million on the transactions, known as an "elephant deals," which are structured to pay returns to clients over several years.

The fine shines an uncomfortable spotlight on the bank's dealings under former chief executive Bob Diamond. Under his watch Barclays's structured capital markets team gained a reputation for building highly profitable and complex financial products. The bank also boasted close relationships with a number of high profile Middle Eastern investors.

The U.K.'s Serious Fraud Office launched an investigation in 2012 into whether the bank breached disclosure obligations when raising billions of pounds from investors that included Qatar Holdings LLC in 2008.

Thursday's fine isn't linked to that probe, according to a person familiar with the matter.

In its notice the FCA said the transaction involved investments in notes backed by underlying warrants and third-party bonds. It was the largest of its kind that Barclays had executed for high-net-worth clients.

The Barclays compliance staff named in the bank's systems as giving approval for the transaction had no idea they were named as doing so, the FCA said. Barclays also relied on Internet research to check the clients' sources of wealth.

While the FCA noted that there was nothing wrong in keeping a hard copy of documents locked in a special safe, "few people in Barclays" new where the safe was, or that it even existed.

"Barclays went to unacceptable lengths to accommodate the clients," the notice said.

Ian Walker

contributed to this article.

Write to Ian Walker at ian.walker@wsj.com

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