Barclays chief faces whistleblower probe
CEO tried to unmask tipster who alerted bank to concerns related to a senior executive
LONDON— Barclays Plc chief executive officer Jes Staley faces a “significant” pay cut and a regulatory probe for trying to unmask an anonymous whistleblower last year.
The U.K. Financial Conduct Authority (FCA) is investigating both Staley’s individual conduct relating to the complaint and the bank’s responsibilities and controls in connection with whistleblowing, the bank said in a statement. The violation of policy leaves Staley, 60, open to a fine or a ban from the industry if the FCA deems him not “fit and proper” to lead the firm. Staley, who will be reprimanded by the firm, has admitted his error and apologized. The former JPMorgan Chase & Co. executive made restoring Barclays’ reputation the centrepiece of his tenure, after the bank was fined billions of pounds over scandals including rigging Libor, gaming currency markets and wrongfully selling customers insurance products they didn’t need. The FCA and Serious Fraud Office are separately investigating the bank’s 2008 emergency fundraising backed by Qatar, where questions have been raised about the proper disclosure of fees and services agreements between the two parties.
“At present, Staley will probably survive as CEO, but if other allegations of unethical behaviour emerge, this could change,” said Andre Spicer, a professor specializing in organizational behaviour at the Cass Business School at City University in London.
“No one within the bank is likely to trust the whistleblowing system any more.”
Staley tried to identify a tipster who alerted the bank to a personal matter involving a senior executive, the bank said, confirming what a person with knowledge of the matter told Bloomberg earlier Monday.
An investigation by law firm Simmons & Simmons LLP, commissioned by Barclays, concluded that Staley “honestly, but mistakenly” believed that it was permissible to identify the author of the letter. The case is also under scrutiny by the Department of Financial Services in New York, the person said.
“I have apologized to the Barclays board and accepted its conclusion that my personal actions in this matter were errors on my part,” Staley said in a statement.
“I will also accept whatever sanction it deems appropriate. I will cooperate fully with the FCA and the Prudential Regulatory Authority, which are now both examining this matter.”
Staley has recruited several former colleagues from JPMorgan Chase & Co., where he spent more than three decades, since joining in December 2015. The CEO rebuffed calls to spin off or radically shrink the securities unit, instead opting to speed up sales of unwanted assets and sell down the firm’s African banking stake to reduce the bank’s capital requirements.
Staley received a £1.3-million ($2.15 million Canadian) annual bonus and he may be docked the entire amount as a result of the scandal, according to a person familiar with the board’s investigation.
The bank will not make a decision about how much to deduct until after the U.K. regulators complete their investigation.
The CEO was awarded £7.53 million ($12.46 million) in total compensation including benefits for last year.
The attempt to identify the whistleblower came to the attention of Barclays directors early this year after an employee raised concerns. The board notified the FCA and the PRA and other authorities.
The allegations in the letters relate to Tim Main, who joined the bank in June and previously worked under Staley at JPMorgan.