Compliance
Barclays To Shell Out Nearly $100 Million To Settle SEC Charges
The bank has agreed to pay a hefty fine to draw a line under allegations it overbilled tens of thousands of clients.
Barclays has agreed
to pay a $97 million fine to settle violations that resulted in
clients being overcharged by nearly $50 million, the US Securities
and Exchange Commission has said.
The regulator found that two of Barclays' advisory programs
billed more than 2,000 clients for due dilligence and monitoring
of certain third-party investment managers and investment
strategies when, in fact, these services were not executed
properly and underperformed as a result.
The bank also collected excess mutual fund sales charges or fees
from 63 brokerage clients by recommending more expensive share
classes when cheaper ones were available, the SEC said.
Another 22,138 accounts paid excess fees to Barclays due to
miscalculations and billing errors by the firm, the SEC
added.
Barclays neither admitted nor denied the charges, but agreed to
create a Fair Fund to refund advisory fees to affected clients.
This will be comprised of $49,785,417 in disgorgement;
$13,752,242 in interest; and a $30 million penalty.
The bank will directly refund an additional $3.5 million to
advisory clients who invested in the investment managers and
strategies that underperformed.
“Barclays failed to ensure that clients were receiving the
services they were paying for,” said C Dabney O’Riordan, co-chief
of the SEC enforcement division’s asset management unit.
“Each set of clients who were harmed are being refunded
through the settlement.”
