Barclays to pay $13.75m to settle US claim

Barclays will pay $13.75 million (€ 12.6 million) to settle a US regulator's claims that inadequate procedures for supervising mutual fund sales led to thousands of unsuitable transactions affecting the bank's retail brokerage customers.

The sanction includes $10 million that will go to harmed investors and a $3.75 million fine, the Financial Industry Regulatory Authority said on Tuesday.

The alleged misconduct spanned five years and involved more than 6,100 transactions in which clients of Barclays’ brokerage unit were switched from one mutual fund to a similar one, with the result being higher costs in some instances, according to a settlement order.

The regulator stated that almost 40 per cent of mutual fund transactions reviewed by Barclays over a six-month period were found to be unsuitable, with 343 customers experiencing financial harm totalling more than $800,000, including losses.

The period in which the bank had insufficient supervisory systems was from January 2010 through to June 2015, the regulator said.

Barclays agreed to the settlement without admitting or denying the allegations, the regulator said. Barclays spokesman Marc Hazelton declined to comment.

- Bloomberg