Barclays has been fined $13.75 million in the US after it let clients make unsuitable mutual fund transactions.
The Financial Industry Regulatory Authority said that Barclays, which is based in London, allowed clients to make more than 6,100 mutual fund switches over a five year period.
FINRA said that in many cases the benefits of switching were outweighed by transaction fees, costing customers $8.63m.
Barclays did not admit or deny wrongdoing in agreeing to the settlement. A spokeswoman declined to comment.
FINRA added that from March to August 2014, Barclays processed 1,723 fund transactions, amounting to 39 per cent of those the bank reviewed, that did not match the investor’s aims or risk criteria.
Mutual funds bring together multiple investors in one pool of funds. The fund that can then be invested in securities like stocks or bonds.
Brad Bennett, FINRA’s Executive Vice President and Chief of Enforcement said, “The proper supervision of mutual fund switching and breakpoint discounts is essential to the protection of retail mutual fund investors.”
Barclays was fined £72 million in the UK in November for failing to conduct proper checks on super-rich clients to avoid inconveniencing them.
The so-called “elephant deal”, the name for deals worth more than £20m, was reportedly on behalf of Qatari clients. Barclays agreed to pay the clients £37.7 million if their privacy was lost.
