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SEC Targets Barclays Capital With Due Diligence, Disclosure and Other Charges

The SEC recently reached a settlement agreement with Barclays Capital, a registered investment adviser and broker-dealer, in which Barclays Capital agreed to pay a total of $97 million, including a $30 million fine and disgorgement with interest to clients. According to the SEC’s order, Barclays Capital (which in 2015 sold its wealth management advisory unit) improperly overcharged certain advisory clients of its wealth and investment management business almost $50 million in advisory fees. Barclays Capital did not admit to or deny the SEC’s charges. The SEC found that, over the period of September 2010 through December 2015, Barclays Capital: falsely represented to clients that it was performing ongoing due diligence and monitoring of certain advisers who managed the clients’ assets; charged client accounts excess fees of approximately $2 million; disadvantaged certain retirement plan and charitable organization brokerage customers by recommending and selling them more expensive mutual fund share classes when less expensive share classes were available; and did not make appropriate related disclosures to the clients.  

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