FINRA today ordered Barclays Capital to fork over more than $10 million to compensate customers for mutual fund-related suitability violations. It was also censured and fined $3.75 million.
FINRA found that from January 2010 through June 2015 the firm did not do enough to prevent unsuitable mutual fund switching and that it fell down on its obligation to ensure than that any recommendations to switch funds were in the client's best interest. The financial gain or investment objective of mutual fund switches should not be undermined by the transaction fees associated with such switches, the regulator said.
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