Barclays chief could face ban from industry over hunt for whistleblower

THE boss of Barclays could be forced to quit after extraordinary allegations that he tried to use the bank’s security team to unmask a whistleblower.

The lender revealed yesterday that chief executive Jes Staley had been issued with a formal reprimand for trying to expose who was behind criticisms of one of his top employees.

Mr Staley was apparently incensed by two anonymous letters, sent to the Barclays board, which attacked senior staff member Tim Main and demanded to know where they had come from.

But his quest for a name – which even involved US law enforcement agencies – breached rules protecting the identity of whistleblowers. Yesterday, Barclays said that Mr Staley had been disciplined and his pay would also be docked – possibly by up to £1.3million, or his entire bonus.

However, it also emerged last night that two regulators have now opened a joint investigation into his conduct – which could lead to much tougher sanctions.

Both the Financial Conduct Authority and the Prudential Regulation Authority will look into his behaviour. This could ultimately see him fined, stripped of his job, or even banned from running a financial institution.

MPs yesterday slammed his conduct. John Mann, a Labour member of the Treasury select committee, said: ‘A chief executive trying to uncover a whistleblower is a colossal abuse of power. If these allegations are true, Jes Staley should resign – otherwise the board should sack him.’

Tim Farron, leader of the Liberal Democrats, said: ‘ If the inquiries find serious wrongdoing by Mr Staley, then he will have to do the honourable thing and go.’

Gary Greenwood, an analyst at Shore Capital, said: ‘Given Barclays’ history of regulatory misdemeanours – most notably the high-profile investigation into Libor rigging – this latest revelation represents a very significant embarrassment for the board.’

The scandal began after Mr Staley, 60, launched a hiring spree to poach senior bankers from his former employer JP Morgan. Mr Main, 50, joined the bank in June last year as head of its global financial institutions group. He had previously spent 23 years at the Wall Street giant.

The chief executive took a keen interest in his appointment, although it is not clear if he was part of the interview process.

Within days of his hiring, anonymous letters were delivered to Barclays’ board. It is believed they raised concerns about the way in which Mr Main was hired.

Mr Staley was shown one of the letters and told about the other, and wanted to investigate the source of the documents – believing they were a personal attack.

Barclays’ board insisted that was not allowed and instead launched an internal investigation, which dismissed the claims.

Mr Staley asked about the case the following month and was told the matter was closed.

However he decided to try and find out where the messages were from. The boss demanded help from the bank’s security team, which is normally focused on preventing attacks from hackers.

They began a probe and sought help from a US law enforcement agency, but their efforts ended in failure and the whistleblower was never uncovered.

Mr Staley’s actions were only uncovered earlier this year when an unconnected complaint was sent to bosses over problems with whistleblowing procedures.

The board appointed law firm Simmons & Simmons to look into the matter and was forced to alert the FCA. The scandal was made public in a stock market statement yesterday after the regulator told Barclays it was launching an investigation.

The bank said that Mr Staley would suffer a ‘very significant’ hit to his pay packet, which was £4.2million last year, as well as receiving a written warning.

It is understood this might mean he is stripped of his £1.3million annual bonus for 2016, or else suffer a bonus cut this year.

The board claims that Mr Staley wrongly thought he was free to try and identify the letters’ author after the Barclays’ investigation was finished. Mr Staley himself addressed the issue in a memo to staff last night. He said: ‘This was a mistake, I apologise.’

The FCA could fine Mr Staley or ban him from running a financial institution, either for several years or permanently. It is also probing Barclays and is working with the Bank of England.

If Mr Staley has to quit, he will be the third chief executive forced to leave Barclays prematurely.

His predecessor Antony Jenkins was sacked for taking too long to turn the lender around. Bob Diamond, the boss before that, resigned in disgrace over the Libor rate-rigging scandal.

‘Abuse of power’ ‘This was a mistake’