Barclays has been fined $3.75 million and ordered to pay $10 million in restitution for switching clients into unsuitable mutual funds, Finra announced Tuesday.
The disciplinary action was for improper mutual fund switches in 6,100 transactions between January 2010 and June, the regulatory organization said.
Finra said Barclays should have had a computer system that monitored the suitability of transactions. In addition, Finra contended Barclays had an obligation to send the affected customers letters disclosing the transaction costs.
Barclays failed to provide adequate guidance to supervisors to ensure retail investor mutual fund transactions were suitable based upon customer investment objectives, risk tolerance and account holdings, Finra said.