Barclays to pay $13.75 million fine to settle US charges over mutual funds

Barclays has been fined $13.75 million (£9.3 million) by US regulators over allegations that it let some customers make unsuitable mutual fund transactions.

Barclays, which has paid more than £280 million in fines to UK regulators this year, allowed clients to make more than 6100 mutual fund switches over a five-year period, according to the Financial Industry Regulatory Authority (FINRA).

The agency said that in many cases the benefits of switching were outweighed by transaction fees.

The damage to customers, most of whom were not warned of the costs, was put at $8.63 million.

Barclays did not admit or deny wrongdoing in agreeing to the settlement. A spokesman did not immediately return requests for comment.

FINRA said that from March to August 2014, Barclays processed 1723 fund transactions, or 39% 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 is then 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 £20 million, was reportedly on behalf of Qatari clients.

Barclays agreed to pay the clients £37.7 million if their privacy was lost.

Additional reporting by Reuters