FSA slaps £7.7-mn fine on Barclays for mis-selling funds
18 Jan 2011
The Financial Services Authority (FSA) has asked Barclays Bank plc (Barclays) to shell out £7.7 million for mis-selling two funds, the highest fine imposed by the FSA for retail failings.
Barclays has also been ordered to pay compensation of up to £60 million to the affected customers.
Between July 2006 and November 2008 Barclays sold Aviva's Global Balanced Income Fund (the Balanced Fund) and Global Cautious Income Fund (the Cautious Fund) to 12,331 people with investments totalling £692 million.
However, the banking giant failed to ensure the funds were suitable for customers in view of their investment objectives, financial circumstances, investment knowledge and experience. The bank's sales staff also failed to adequately explain the risks associated with the funds, the FSA noted.
Margaret Cole, the FSA's managing director of enforcement and financial crime, said ''the FSA requires firms to have robust procedures in place to ensure any advice given to customers is suitable''.
''On this occasion however, Barclays failed to do this and thousands of investors, many of whom were seeking to invest their retirement savings, have suffered. To compound matters, Barclays failed to take effective action when it detected the failings at an early stage,'' she added.
