Barclays banks faces huge fines for poor advice

| 18/01/2011

(Bloomberg): The UK’s third-biggest bank may have to pay motr than $106 million in fines and compensation for failing to disclose the risk in two funds it sold to thousands of retirees. The bank was fined 7.7 million pounds and may need to return as much as 59 million pounds to customers who received bad investment advice, the Financial Services Authority said Tuesday. The fine is the biggest imposed by the London-based regulator for retail deficiencies. Barclays failed to ensure that Aviva’s Global Balanced Income Fund and Global Cautious Income Fund were suitable for customers and didn’t properly train sales employees from July 2006 through November 2008, the FSA said.

The fine comes a week after Barclays Chief Executive Officer Robert Diamond told Parliament “the period of remorse and apology” for the credit crisis needs to end so banks can rebuild confidence.

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