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Regulators investigating Barclays chief exec over whistleblowing failures

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  • 10/04/2017
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Regulators investigating Barclays chief exec over whistleblowing failures
Barclays chief executive Jes Staley is facing regulatory investigations, a severe reprimand and financial penalty from the bank regarding his attempt to identify an internal whistle blower.

This included the bank making contact with a U.S. law enforcement agency to identify the whistleblower – an attempt which proved unsuccessful.

The Financial Conduct Authority (FCA) and Prudential Regulatory Authority (PRA) are investigating Staley’s (pictured) conduct and senior manager responsibilities relating to Barclays whistleblowing programme.

Barclays has given Staley a formal written reprimand and will cut his bonus as a result of the affair. Staley has apologised and said he will cooperate fully with the investigations.

The exact amount of the penalty will be decided once the regulators have completed their inquiry.

Regulators are also investigating Barclays Bank’s responsibilities relating to Staley’s attempt to identify the author, as well as its systems and controls and culture relating to whistleblowing.

 

Further action

And the issue could still go further within the bank as it confirmed the board was reviewing the position of other employees involved.

Barclays commissioned international law firm Simmons & Simmons to conduct an investigation into the incident.

It found that two whistleblowing letters were sent in June 2016 raising concerns about a senior employee who had been recruited by Barclays earlier that year.

These included concerns of a personal nature about the senior employee, Staley’s knowledge of and role in dealing with those issues at a previous employer, and the appropriateness of the recruitment process followed on this occasion by Barclays.

 

Inappropriate

Staley considered the letters were an unfair personal attack on the senior employee and requested that the Group Information Security (GIS) team attempt to identify the authors.

Staley was told this was not appropriate.

A month later, after enquiring if the whistleblowing issue had been cleared, Staley again attempted to identify the author of one letter.

Again, Staley requested that GIS attempt to identify the author of the first letter and it contacted and received assistance from a U.S. law enforcement agency.

Staley was informed of this and the results, however, ultimately this attempt was unsuccessful in identifying the author and no further steps were taken to do so after that.

 

Highest possible ethical standards

Barclays chairman John McFarlane said: “I am personally very disappointed and apologetic that this situation has occurred, particularly as we strive to operate to the highest possible ethical standards.

“The board takes Barclays culture and the integrity of its controls extremely seriously. We have investigated this matter fully using an external law firm and we will be commissioning an independent review of Barclays processes and controls to determine what improvements may be required.”

McFarlane added: “The board has concluded that Jes Staley, group chief executive officer, honestly, but mistakenly, believed that it was permissible to identify the author of the letter and has accepted his explanation that he was trying to protect a colleague who had experienced personal difficulties in the past from what he believed to be an unfair attack, and has accepted his apology.

“Taking into account both the circumstances of this matter and his otherwise exemplary record since joining Barclays, including contributing significantly to improvements in Barclays culture and controls, Jes continues to have the board’s unanimous confidence and it will support his re-appointment at Barclays Annual General Meeting on 10 May 2017.”

 

Errors

Staley said: “I have apologised to the Barclays board, and accepted its conclusion that my personal actions in this matter were errors on my part.

“I will also accept whatever sanction it deems appropriate. I will cooperate fully with the Financial Conduct Authority and the Prudential Regulatory Authority, which are now both examining this matter.

“Our whistleblowing process is one of the most important means by which we protect our culture and values at Barclays and I certainly want to ensure that all colleagues, and others who may utilise it, understand the criticality which I attach to it.”

 

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