New York, NY – Barclays Capital, Inc. has agreed to pay $800,000 to settle charges brought by the U.S. Commodity Futures Trading Commission (CFTC) for failing to adequately supervise the processing of exchange and clearing fees charged to its customers. The CFTC alleges the Connecticut-based firm, headquartered in New York City, violated regulations related to diligent supervision between January 2011 and April 2015.
According to the CFTC’s order, Barclays did not maintain sufficient systems to reconcile invoices received from exchange clearinghouses with the fees actually billed to customers. The firm also lacked adequate policies and procedures, and failed to properly train staff on completing these crucial reconciliations.
This oversight resulted in Barclays overcharging some customers a total of approximately $1.1 million. The CFTC found that Barclays identified the issue in 2012 and subsequently took corrective measures, including refunding the affected customers.
The settlement requires Barclays to pay the $800,000 civil monetary penalty and cease and desist from further violations of CFTC supervision regulations. The CFTC acknowledged Barclays’ cooperation and its efforts to rectify the deficiencies once discovered.
This marks the second enforcement action by the CFTC concerning clearing firm failures in fee processing. In August 2014, Merrill Lynch, Pierce, Fenner & Smith Incorporated was ordered to pay a $1.2 million penalty for similar issues.
The case was led by CFTC Division of Enforcement staff members Susan Gradman, Brigitte Weyls, Joseph Patrick, Jennifer Smiley, Elizabeth Pendleton, Scott Williamson, and Rosemary Hollinger.
Source: CFTC.gov
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