Barclays Fined $13.75m


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Barclays investment bank is to pay more than $13.75m (£9.3m) over accusations it let US customers make unsuitable mutual fund deals over five years.

The US Financial Industry Regulatory Authority (Finra) said Barclays Capital will pay more than $10m in compensation to the customers affected.

The bank will also pay a fine of $3.75m.

Barclays has not admitted wrongdoing in agreeing to the settlement, which includes a censure.

The regulator said that between January 2010 and June 2015, Barclays failed to supervise adequately procedures that saw many customers swap one mutual fund for another.

In many instances, the benefits of switching funds may have been undermined by the transaction costs, it added.

More than 6,100 fund switches took place during the five-year period

A total of $8.63m was lost by customers in this way during the five years and most customers were not warned by the bank of the cost of switching before doing so, the regulator said.

Finra added that from March to August 2014, Barclays processed 1,723 fund transactions, or 39 percent of those it reviewed, that were inconsistent with its customers’ investment aims, risk appetite or other investments.


 

Disposal

 

The fine comes two months after Barclays appointed former JP Morgan senior executive James “Jes” Staley to the role of chief executive and signalled its renewed focus on investment banking.

Mr Staley is in the process of cutting costs within the bank and disposing of assets that are not seen as core to the business.

In November, Barclays was fined £72m in the UK for failing to conduct proper checks on very rich clients because it did not want to inconvenience them.

The City regulator said Barclays arranged a deal worth £1.88bn for wealthy clients in 2011 and 2012, which it kept quiet.

It did not conduct the proper checks on clients, who should have been considered politically high risk.

 

-Myjoyonline


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