Barclays will refund $97 million to advisory, brokerage clients

Firm agrees to settle three sets of SEC violations concerning overcharges.

In a settlement with the Securities and Exchange Commission, Barclays Capital has agreed to refund more than $97 million in advisory and mutual fund fees to clients who were overcharged.

Barclays, which neither admitted nor denied the SEC’s findings of three sets of violations, agreed to create a fund to refund advisory fees to overcharged clients, the SEC said in a release.

The fund will consist of $49.8 million in disgorgement plus $13.8 million in interest and a $30 million penalty. Barclays will refund an additional $3.5 million to advisory clients who invested in third-party investment managers and investment strategies that underperformed while going unmonitored. Funds also will go to brokerage clients who were steered into more expensive mutual fund share classes.

The SEC’s order said that two Barclays’ advisory programs charged fees to more than 2,000 clients for due diligence and monitoring of third-party investment managers and investment strategies when these services weren’t actually being performed as represented.

The SEC said that Barclays also collected excess mutual fund sales charges or fees from 63 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.