Ed. Note: This article first appeared in Reuters
British bank Barclays has reprimanded CEO Jes Staley and will cut his bonus heavily after he tried to uncover the identity of an internal company whistleblower in a case being investigated on both sides of the Atlantic.
In a statement on Monday, Barclays disclosed that British authorities were investigating American Staley’s attempts to find out who wrote a letter that revealed “concerns of a personal nature” about an unnamed senior employee.
New York’s Department of Financial Services is also investigating, a person familiar with the matter said.
A legal investigation ordered by the bank found that Staley’s efforts involved a U.S. law enforcement agency and contradicted the company’s own policy. Barclays grants whistleblowers anonymity to prevent any retribution for their actions – in keeping with normal UK practice.
“I have apologized to the Barclays board, and accepted its conclusion that my personal actions in this matter were errors on my part,” former JPMorgan banker Staley said in a statement.
Barclays said its board would back Staley’s reappointment at the company’s annual shareholder meeting on May 10.
Analysts said that Staley’s position as CEO could come under pressure if regulators’ reports on the case, expected to take a matter of months, were especially critical of his conduct.
Staley, who took the role in Dec. 2015, stands to lose a chunk of the 1.3 million pound ($1.6 million) bonus he was awarded this year, but the final amount to be docked is yet to be decided, a separate source said.
Staley said in a memo to Barclays staff that he had been attempting to protect a colleague from an unfair personal attack.
“In my desire to protect our colleague, however, I got too personally involved in this matter,” Staley wrote in the memo.
The investigations are the latest in a series of regulatory problems for the bank, which is still dealing with investigations into employees’ manipulation of Libor benchmark interest rates.
The whistleblower probe is particularly embarrassing for Barclays since it relates to recent wrongdoing rather than being a legacy of financial crisis-era misconduct, and because Staley himself has made much of the bank’s efforts to clean up its act.
“I am personally very disappointed and apologetic that this situation has occurred, particularly as we strive to operate to the highest possible ethical standards,” Barclays Chairman John McFarlane said in the company’s statement.
Barclays shares fell as much as 0.7 percent on Monday but were trading 0.65% higher by 1340 GMT.
Barclays’ board first heard of Staley’s attempt to identify the author of the letter in early 2017, after the issue was raised by an employee, Barclays said.
The board instructed law firm Simmons & Simmons to carry out an investigation led by Gerry Grimstone, the bank’s deputy chairman, and also notified the regulators.
“The investigation … found, and the board has concluded, that Mr Staley honestly, but mistakenly, believed that it was permissible to identify the author of the letter,” the bank said.
The lawyers’ report also said that Staley had requested the bank’s internal security team contact U.S. enforcement officers to help identify the whistleblower, and that such assistance was received albeit without discovering the identity of the person.
The board will issue a formal written reprimand to Staley and make a “very significant” adjustment to his variable compensation award.
The board will also look into the position of other employees involved in the incident.
Staley, 60, has embarked on a sweeping revamp of the lender’s strategy since taking over Barclays, slashing its business in Asia and Africa in favor of a new ‘transatlantic’ focus on the U.S. and Britain.
A career investment banker who spent 34 years at JPMorgan, Staley is popular among staff in Barclays’ investment bank for bringing back some of its risk-taking swagger after the hairshirt regime of predecessor Antony Jenkins.
The attempts to uncover the whistleblower took place despite the bank’s appointment of a ‘whistleblower champion’ – Mike Ashley, the chairman of its Board Audit Committee.
In 2016, Ashley emailed all Barclays employees with a video spelling out the bank’s policy on protecting whistleblowers, according to the lender’s annual report.
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