Barclays Capital has reached a settlement with the SEC to refund over $97 million in advisory and mutual fund fees to customers the firm allegedly overcharged. The firm also agreed to set up a fund to repay advisory fees to the overcharged customers, the SEC said. This fund will consist of $49.8 million in disgorgement plus $13.8 million in interest, plus a $30 million penalty. Barclays with also refund $3.5 million to advisory clients who invested in third-party investment managers and investment strategies that underperformed while not being monitored. Money will additionally go to brokerage clients who were swayed toward more expensive mutual fund share classes.
The SEC’s order states that two Barclays’ advisory programs charged fees to over two thousand customers for due diligence and monitoring of third-party investment managers and investment strategies when these services were not really being performed as purported.
The SEC stated that Barclays additionally acquired extra mutual fund sales charges or fees from sixty-three 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 said.
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