Tue, Apr 11, 2017 page10

• Barclays probed over whistle-blower program

  ‘HONEST BUT MISTAKEN’: The bank has accepted CEO Jes Staley’s explanation that he believed trying to uncover the identity of a letter’s author was permissible

  • AFP, LONDON
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  Barclays yesterday confirmed it was under investigation along with its chief executive officer Jes Staley over his attempts to uncover the identity of a whistle-blower within the British financial giant.

  In a statement, Barclays said the British Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have “commenced investigations into Jes Staley, as to his senior manager responsibilities relating to Barclays’ whistle-blowing program, and Barclays Bank.”

  The board said it had accepted Staley’s explanation that he did not know he was not allowed to try to identify the author of a whistle-blowing letter sent last year.

  “The board has concluded that Mr Staley honestly, but mistakenly, believed that it was permissible to identify the author of the letter,” it said.

  The bank vowed to “cooperate fully” with the FCA and PRA investigations and said that “a very significant compensation adjustment” would be made to Staley’s pay packet this year.

  Staley said he had apologized to the Barclays board and accepted its findings.

  “Our whistle-blowing 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 utilize it, understand the criticality which I attach to it,” he said.

  An anonymous letter was sent to board members last year raising concerns about a senior employee who had recently been recruited, including issues of a personal nature, the bank explained.

  Staley requested that the bank’s Group Information Security team find who wrote the letter which he viewed as “an unfair personal attack on the senior employee.”

  The board found out about Staley’s actions early this year and instructed an external law firm, Simmons & Simmons, to investigate. It also informed the FCA and PRA.

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

  The British bank, which was hit hard by the financial crisis, appointed Staley, a former JPMorgan investment banker, as its chief executive in 2015.

  The 60-year-old American declared on his appointment that he would seek to “preserve and enhance” trust in the lender, whose reputation was badly damaged by foreign exchange and LIBOR benchmark interest rate rigging scandals.

  Staley’s predecessor Antony Jenkins was sacked by the bank in July 2015 in the wake of the scandals.

  Jenkins had been in the job since July 2012 when he replaced Bob Diamond — who himself was forced to resign after the LIBOR rate-fixing scandal.

  In May 2015, Barclays was hit with a fine of US$2.3 billion by US and British regulators for manipulation of foreign exchange trading. Five other global banks have been fined over the affair.

  In 2012, the bank was fined US$424.4 million by British and US regulators for attempted manipulation of LIBOR and EURIBOR interbank rates between 2005 and 2009.

  In January, the bank announced a new round of job cuts, axing 1,200 positions at its investment banking division, exiting Russia and closing offices across Asia.

  The job losses were the first round of cutbacks unveiled by Staley and followed a wave of 7,000 job cuts which began in 2014.
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