Barclays Capital to Refund $97 Million to Overcharged Advisory Clients

(CN) – Barclays Capital has agreed to refund $97 million in overbilled fees and mutual fund sales charges to about 25,000 advisory clients.

The Securities and Exchange Commission said Wednesday the bank overcharged clients by approximately $50 million because it lacked procedures to validate whether clients were properly billed.

“Barclays failed to ensure that clients were receiving the services they were paying for. Each set of clients who were harmed are being refunded through the settlement,” said Dabney O’Riordan, co-head of the SEC’s enforcement unit.

The SEC’s order says that two Barclays advisory programs charged fees to more than 2,000 clients for due diligence and monitoring of certain third-party investment managers and investment strategies when in fact these services weren’t being performed as represented.

In addition, Barclays also allegedly 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 government said.

A spokesman for Barclays, which settled the charges without admitting or denying the allegations, declined to comment.

The settlement amount consists of $50 million in disgorged funds, $14 million in prejudgment interest and a $30 million penalty.

In addition, Barclays will pay an additional $3.5 million to advisory clients who paid fees for due diligence that wasn’t being performed.

 

 

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