Category: Banking

Barclays Penalized for Overcharging Customers

The US Securities and Exchange Commission announced that London-based Barclays Bank will be refunding its customers almost $100 million in fees that were wrongly charged.

According to the SEC the banking giant overbilled their investment clients by almost $50 million.

“Barclays failed to ensure that clients were receiving the services they were paying for,” said C Dabney O’Riordan, co-chief of the SEC Asset Management Unit.

The re-imbursement will total US$97, including the original $50 million overcharge plus a US$30 million penalty and another $13.8 million in interest. The money will be placed in a fund dedicated to reimbursement and compensation of the overcharged investors.

Barclays charged about 2,000 clients for due diligence and monitoring services which were not delivered as expected. An additional 63 investors paid too much for mutual fund sales charges as a result of the bank recommending pricier share classes.

The SEC also found that 22,138 accounts had billing mistakes.

Barclays has neither denied or admitted to wrongdoing. A formal expression of guilt could expose companies to harmful investor lawsuits. The SEC almost never requires any admission of guilt.

New Regulations Hope to Disable Mexico-US Money Laundering Schemes

New Regulations Will Help to Curtail Money Laundering
New Regulations Will Help to Curtail Money Laundering. Photo courtesy Images Money

In response to what the Financial Times reports as over $10 billion in illicit funds that are laundered each year in the US, the US government has recently placed tough new controls on banks. The move is designed to slow down, if not stop, the entrance of narcotic profits from Mexican drug cartels into the US banking system. In their efforts to comply with the regulations several large US-based banks have recently begun to shut down their branches near the US-Mexican border.

The FT article, entitled “Mexico: Clearing Out,” describes members of the US banking industry claiming that legal, legitimate businesses and above-board financial transactions are being dragged into the fray, causing damage.

“The crackdown on money laundering has not necessarily curtailed the practice, but instead may simply have pushed it further underground. The up to $10bn in illicit cash that used to flow through the system is still going to the US, the senior Mexican banker says: “It’s just no longer on the radar.””

The final straw that forced US regulators to take strong action was revealed in an article in Breitbart Texas, discussing Mexican cartel money laundering within the US banking industry.

“World banking giant, HSBC, got caught with its hand in a money laundering scheme that helped drug cartels turn nearly a billion dollars in narco-cash into gold. HSBC only faced a fine for their complicity, but members of money-laundering organizations (MLO) are now facing up to twenty years.”

Although HSBC was heavily fined, none of the banking execs went to prison for their behavior, which enabled Mexico’s intense drug war.

Niall Booker Leaves HSBC

Niall Booker will be leaving his position as CEO and group managing director of NSBC North America Holdings.  He worked at the firm for more than three decades and was key in business development in India as well as impacting business in North America.  Booker will be replaced by HSBC Bank USA’s president, CEO and group general manager, Irene Dorner on November 1, 2011. In her new capacity, Dorner will be in charge of America’s HSBC Finance businesses as well as HSBC Bank, reporting to Stuart Gulliver, HSBC Group CEO.