Without admitting or denying the Securities and Exchange Commission’s (SEC) findings, Barclays has agreed to settle charges that clients being overcharged by nearly $50m.
More than 2,000 clients paid for due diligence and third-party investment manager and strategy monitoring despite not receiving these services.
Barclays also collected excess mutual fund sales charges or fees from 63 brokerage clients by recommending more expensive share classes, despite cheaper alternatives being available.
Another 22,138 accounts paid excess fees to Barclays following miscalculations and billing errors by the bank.
“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.”
Barclays has agreed to create a ‘Fair Fund’ to refund advisory fees to harmed clients.
The fund will consist of $49,785,417 in disgorgement plus $13,752,242 in interest and a $30m penalty.
Barclays will directly refund an additional $3.5m 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.