Terry Smith is suing Barclays for £220,000 for failing to transfer money, claiming he lost out on investment returns in his Fundsmith Equity fund.
Smith, who was formerly the boss of Tullett Prebon, says it took Barclays almost three years to transfer money from a company owned by him, reports The Times.
Smith says he asked Barclays in September 2012 to transfer £330,000 from his company Aethelflaed Investments that he intended to use to invest in the Fundsmith fund.
Smith says he tried to email and telephone call the bank to transfer the money but was told he had to go into the Hounslow branch to make the transfer.
A spokeswoman for Smith says: “To say that the service the claimant and Terry received from Barclays Bank was atrocious is an understatement. Aethelflaed is compelled to pursue this action and looks forward to hearing the court’s decision.”
Smith calculated the difference in the unit price of the fund between September 2012 and July 2015 when he bought the fund, in which time it had risen by 166 per cent.
Barclays is fighting the case and denied it caused Smith any loss through negligence, saying Smith was “contributorily negligent in failing to make the payment order in a branch with identifications as it [Aethelflaed] was required to do”.
A spokesman for Barclays says: “We cannot comment on a matter which is currently in litigation, save to confirm that we will be vigorously defending this case.”
If all he had to do was go into the branch to arrange the transfer – presumably because of the amount involved – why didn’t he do that – would have saved a lot of heartache –
Makes one wonder why for three years he didn’t realise the transfer hadn’t taken place – it was £330,000 after all so no small sum. It reflects badly on him as a fund manager if he didn’t notice and this even if Barclays had any culpability initially for not enacting a transfer. However, the liability would have been days not years! The embarrassment extends to the auditor as well if it didn’t ‘notice’! Best to have let go quietly I think… and you can’t blame Barclays for the ridiculous amount of rules in its interpretation of the ML or ID rules.
Re: The above comments. Knowing what I do about Terry Smith I don’t think it is quite as reported. Personally I’m surprised he hasn’t sued them for 20 times as much. Barclays is a bye word for sharp practice and abysmal service, while Terry really is one of the investment heroes of our time. From ‘Accounting for Growth’ to Fundsmith – a man worth following.