The error was called “basic”, “bizarre” and “embarrassing” by analysts, and Barclays said it was investigating the cause and responding to inquires from regulators. Among those asking questions are officials in the U.S. Securities and Exchange Commission’s enforcement division, according to a person familiar with the matter.

Major banks typically file for blanket registrations that allow them to regularly issue notes that give clients a chance to bet on everything from market volatility to the performance of Tesla Inc. shares. Market observers couldn’t recall a bank’s issuance exceeding the amount it registered, let alone blowing billions past its limit.

“This kind of seemingly basic error may shake confidence in the investment bank going forward,” said Fahed Kunwar, an analyst at Redburn.  “With a new management team in place, there are already questions on the ability of the investment bank to continue to its strong performance.”

Shares in Barclays were down 2.8% as of 11:37 a.m. in London on Monday.

Shelf Registration

Barclays Bank Plc, the subsidiary that holds the lender’s corporate and investment bank, has determined that “securities offered and sold under its U.S. shelf registration statement during a period of approximately one year exceeded the registered amount,” the lender said in the statement.

A shelf registration is an agreement with regulators to allow finance firms to issue securities without applying for approval each time. It allows for a series of issuances without requiring further prospectuses to be filed.

Monday’s announcement helps explain the bank’s recent halt of sales and issuance for a pair of major exchange-traded notes in the U.S.

On March 14, Barclays said it no longer had capacity to support issuance of the iPath Series B S&P 500 VIX Short-Term Futures ETN and the iPath Pure Beta Crude Oil ETN. As a result both products have struggled to price near the value of their underlying assets.

Read more: Barclays VIX ETN turmoil looks linked to error

Chief Executive Officer C.S. Venkatakrishnan, who took charge of the lender last November, was the group’s chief risk officer at the time the registration document was filed.

Rescission Losses

Barclays said in Monday’s statement that its “best estimate at this time” of the rescission losses suggests a charge of about 450 million pounds. The lender’s 1-billion-pound share buyback, originally expected to start in the first three months of the year, is now expected in the second quarter. The unexpected hit might weigh on first-quarter results, analysts at Citigroup Inc. said.

“An unhelpful matter, which has triggered an independent review around the control environment,” said Jefferies analyst Joseph Dickerson. “Regulatory inquiries may weigh on sentiment.”

Read about Barclays’ annual results here

Barclays Bank Plc will file a new automatic shelf registration statement with the Securities and Exchange Commission as soon as practicable. The bank said it remains committed to its structured products business in the U.S.

What Bloomberg Intelligence Says:

Barclays’ errors in issuing structured notes and exchange-traded notes in excess of registered amounts is more a blow to reputation than financials, with half of a near-$600 million hit expected to reverse (hedging) on conclusion of the rescission offer. The deferral of the 1 billion-pound buyback to 2Q from 1Q is disappointing, though again more a sentiment issue than anything fundamental.