The whistleblowing case shakes Barclays board
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have placed the chief executive of Barclays, Jes Staley, under investigation after he reportedly tried to discover the identity of a whistleblower, prompting experts to warn that the case could deter employees from reporting bad behaviour. Barclays said it never learned the identity.
In June 2016, anonymous letters were sent to the Barclays board and a senior executive of the company raising concerns about a senior employee who had been recruited by Barclays earlier that year. It is understood they concerned Tim Main, a friend and former colleague of Staley’s from his 34 years at JP Morgan, as The Telegraph reported.
Main is a well-regarded banker and one of a number of ex-JP Morgan employees that the 60-year-old American Staley hired to help him turn Barclays around. The letters concerned issues of a personal nature about Main’s past, when he worked at the Wall Street firm, and questioned the appropriateness of his recruitment to Barclays, where he is now chairman of its investment bank’s financial institutions group.
The letters, which were being treated as whistleblows, highlighted concerns of a personal nature about the employee, and Staley's knowledge of and role in dealing with those issues at a previous employer. They also raised questions about the appropriateness of Barclays’ recruitment programme on this occasion.
There are strict regulations in the financial services industry about encouraging and protecting whistleblowers. This includes the senior managers and certification regime, which is aimed at improving individual accountability within the financial services industry. The Senior Managers’ Regime was introduced by the FCA and PRA in March 2016, with specific whistleblowing provisions for the financial services industry added in September that year.
Barclays chairman John McFarlane said he was “very disappointed and apologetic” that the whistleblowing incident had occurred.
"The board takes Barclays' culture and the integrity of its controls extremely seriously,” he said. “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."
Barclays has reprimanded Staley and will cut his bonus for attempting to uncover a whistleblower’s identity, the British bank said on Monday. The board, which said it accepted Staley’s explanation that he was trying to protect a colleague from what he believed to be an unfair attack, will back his reappointment at the annual shareholder meeting on May 10.
The probe into Staley’s conduct comes as the latest in a series of regulatory problems for the bank, which is still dealing with investigations into employees’ manipulation of the Libor benchmark interest rates.