Barclay’s Fined $14 Million
CBJ — Barclays of England has agreed to pay almost $14 million to settle regulatory charges in the United States that it let retail brokerage customers make unsuitable mutual fund transactions, including more than 6,100 fund switches, over a five-year period.
The Financial Industry Regulatory Authority said the London-based bank’s Barclays Capital Inc unit will pay more than $10 million in restitution, including interest, to affected customers, and was fined $3.75 million.
Barclays did not admit or deny wrongdoing in agreeing to the settlement, which includes a censure.
FINRA said that from January 2010 to June 2015, Barclays’ inadequate supervisory procedures failed to stop many customers from swapping one mutual fund for another when the benefits of switching might be undermined by the transaction costs. According to the regulator it caused $8.6 million of harm to customers, most of whom were not warned of such costs.
FINRA also said that from March to August 2014, Barclays processed 1,723 fund transactions, or 39% of those it reviewed, that were inconsistent with its customers’ goals, risk tolerance or other investments. It said 343 of these transactions caused more than $818,000 of customer harm.