Barclays hit with fine
By Robert Barr |
January 19, 2011, Wednesday
|
Print Edition
Print Edition
BARCLAYS bank has been hit with a record fine of 7.7 million pounds (US$12.3 million) for giving poor advice to investors in a pair of funds, the UK Financial Services Authority said yesterday.
The regulatory agency said it had also secured nearly 60 million pounds in redress for those customers.
Barclays sold two funds run by insurer Aviva PLC; both were hit hard by the financial downturn in late 2008.
The agency said the bank's failures included not insuring that the funds were suitable for the clients, giving inadequate training to staff, failing to make sure that brochures and other documents were clear and complete, and lax monitoring of sale processes.
"We know that on this occasion we let our customers down and did not do all we could have done to meet the high standards that our customers expect from us and for this we are sorry," said Paul McNamara, Barclays managing director of insurance and investments.
Barclays has already paid 17 million pounds in compensation and could pay 42 million pounds more, the FSA said.
Some 12,331 Barclays customers invested 692 million pounds between July 2006 and November 2008 in Aviva's Global Balanced Income Fund or Global Cautious Income Fund, the FSA said.
More than 1,700 customers complained about the advice they were given.
The fine was the largest the FSA has imposed for retail investment failings, the agency said. No action was taken against Aviva.
Margaret Cole, the FSA's managing director of enforcement and financial crime, said Barclays had identified problems with the sales as early as June 2008 but was slow to act.
The regulatory agency said it had also secured nearly 60 million pounds in redress for those customers.
Barclays sold two funds run by insurer Aviva PLC; both were hit hard by the financial downturn in late 2008.
The agency said the bank's failures included not insuring that the funds were suitable for the clients, giving inadequate training to staff, failing to make sure that brochures and other documents were clear and complete, and lax monitoring of sale processes.
"We know that on this occasion we let our customers down and did not do all we could have done to meet the high standards that our customers expect from us and for this we are sorry," said Paul McNamara, Barclays managing director of insurance and investments.
Barclays has already paid 17 million pounds in compensation and could pay 42 million pounds more, the FSA said.
Some 12,331 Barclays customers invested 692 million pounds between July 2006 and November 2008 in Aviva's Global Balanced Income Fund or Global Cautious Income Fund, the FSA said.
More than 1,700 customers complained about the advice they were given.
The fine was the largest the FSA has imposed for retail investment failings, the agency said. No action was taken against Aviva.
Margaret Cole, the FSA's managing director of enforcement and financial crime, said Barclays had identified problems with the sales as early as June 2008 but was slow to act.
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