• wblogo
  • wblogo
  • wblogo

Barclays to pay $97 million for overcharging clients

Chris Hamblin, Editor, London, 18 May 2017

articleimage

The US Securities and Exchange Commission is requiring Barclays Capital to refund advisory fees or mutual fund sales charges to clients whom it overcharged.

By paying more than $97 million, Barclays agreed to settle charges involving clients being overbilled by nearly $50 million. The SEC’s order finds that two Barclays 'advisory programmes' charged fees to more than 2,000 clients for 'due diligence' and the monitoring of certain third-party investment managers and investment strategies when in fact these services weren’t being performed as represented.  Barclays also collected excess mutual fund sales charges or fees from 63 brokerage clients by recommending more expensive share classes when less expensive share classes were available. Another 22,138 accounts paid excess fees to Barclays due to miscalculations and billing errors by the firm.

The SEC’s order finds that Barclays broke ss206(2), 206(4) and 207 Investment Advisers Act 1940 and Rule 206(4)-7, as well as ss17(a)(2) and 17(a)(3) Securities Act 1933.

Without admitting or denying the SEC’s findings, Barclays agreed to refund victims. Its 'fair fund' will consist of $49,785,417 in disgorgement plus $13,752,242 in interest and a $30 million penalty. Barclays will directly refund an additional $3½ million to advisory clients who invested in third-party investment managers and investment strategies that underperformed while going unmonitored. Those funds also will go to brokerage clients who were steered into more expensive mutual fund share classes.

Latest Comment and Analysis

Latest News

Award Winners

Most Read

More Stories

Latest Poll