New York, NY – August 4, 2016 – Barclays Capital, Inc. has been penalized $800,000 by the U.S. Commodity Futures Trading Commission (CFTC) for failing to adequately supervise its fee processing procedures. The CFTC issued an order finding that Barclays, a Connecticut corporation headquartered in New York City, did not diligently supervise officers, employees, and agents responsible for processing exchange and clearing fees charged to customers trading Chicago Mercantile Exchange, Inc. products between January 2011 and April 2015.
The regulatory body found that Barclays lacked adequate systems to reconcile invoices from exchange clearinghouses with the fees actually charged to customers. Furthermore, the firm’s policies and procedures surrounding fee reconciliation were insufficient, lacking both proper documentation and adequate staff training.
This oversight resulted in Barclays overcharging some customers a total of approximately $1.1 million. The company discovered the issue in 2012 and subsequently took corrective action, including issuing refunds to affected customers.
As part of the settlement, Barclays is required to pay the $800,000 civil monetary penalty and cease and desist from further violations of CFTC regulations regarding diligent supervision. The CFTC acknowledged Barclays’ cooperation and its efforts to rectify the deficiencies once discovered.
This case marks the second enforcement action by the CFTC concerning supervisory failures in fee processing within clearing firms. In August 2014, Merrill Lynch, Pierce, Fenner & Smith Incorporated was ordered to pay a $1.2 million penalty for similar issues.
The CFTC’s Division of Enforcement was led by Susan Gradman, Brigitte Weyls, Joseph Patrick, Jennifer Smiley, Elizabeth Pendleton, Scott Williamson, and Rosemary Hollinger in this investigation.
Source: CFTC.gov
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