Former staff have complained about their treatment at Canadian bank’s London arm
The UK’S City watchdog has begun a full-blown investigation into the working culture at Royal Bank of Canada in London after dozens of former employees complained over their treatment, several people familiar with the matter told the Financial Times.
Inquiries started as a less formal fact-finding exercise last summer when a handful of former staff claimed to have been dismissed after highlighting legal and compliance issues over several years.
They stepped forward after one former employee, a currencies trader, won a case for unfair dismissal, in which he claimed to have been treated poorly after raising concerns over what he saw as a “box-ticking” compliance culture. An appeal on that case is still pending. Since then, the group has grown rapidly.
The step-up by the Financial Conduct Authority comes as the watchdog takes a tougher stance on banking culture and the treatment of whistleblowers. The launch of an official investigation means that if the watchdog finds wrongdoing, the bank faces a substantial fine and the possibility of sanctions for senior managers.
Some of the former staff have approached the FCA directly, while some have been contacted by the regulator, people familiar with the matter said, illustrating the watchdog’s proactive stance. The FCA has held extensive interviews with many of these individuals, seeking to determine whether there is a pattern of poor treatment of staff by the Canadian bank, and how it handles internal complaints about employee behaviour.
One former employee who met the FCA said it was clear the regulator was seriously scrutinising the bank. “There was no way this was just a little exploratory chat,” the person said. “Every question was culture, culture, culture.”
The FCA declined to comment on the live investigation. The bank declined to comment on the investigation or to say whether any staff had been suspended while the inquiry was under way.
“We take our duties as an employer very seriously and promote the freedom for employees to speak up and raise concerns without fear of retaliation,” it said. “We encourage a robust compliance culture and have controls in place to uphold our principles, policies and procedures.”
The treatment of whistleblowers is not the only focus of the regulator’s probe; other issues include the broader handling of complaints and the processes used to dismiss staff. But the FCA is especially keen to foster a safe and open environment for people working in the financial services industry to sound the alarm on any area of poor practice.
The regulator has recently pledged to overhaul its own way of treating whistleblowers after being criticised for not properly protecting individuals’ identities and being lax about acting on their information.
The FCA also came under fire last May for a soft approach to Jes Staley, the chief executive of Barclays, following the watchdog’s investigation into how he twice tried to unveil the identity of an anonymous whistleblower.
Mr Staley became the first person to be penalised under the FCA’S senior managers regime, which aims to hold top managers responsible for failings on their watch, receiving a £642,000 fine. He held on to his job, however, even though the regime gives the power for the FCA to ban top brass. The bank itself escaped any action from UK regulators but received a $15m fine last month from New York watchdogs.
The FCA has pledged to take a tougher approach to culture, and has been deluged by a tide of whistleblowing complaints, with a 220 per cent rise in 2018 in complaints to the regulator about “non-financial” behaviour, such as bullying, homophobia and sexual harassment.
The FCA already has live investigations into companies it suspects of not taking such allegations seriously enough, and put the City on notice in December that firms faced fines and top brass risked their jobs if they did not treat whistleblowers appropriately.