LONDON, April 10 (IFR) - Britain's financial regulators are
investigating Barclays chief executive Jes Staley and the bank
over the handling of a whistleblowing incident.
Barclays said on Monday the investigation by the Financial
Conduct Authority and the Prudential Regulation Authority
relates to an attempt last year by Staley to identify the author
of letters that were treated by Barclays as a whistleblowing
Barclays said it has formally reprimanded Staley and will
"very significantly" cut his bonus. But it said it will support
his reappointment at the bank's annual general meeting on May
Staley, the former head of JP Morgan's investment bank,
became Barclays chief executive in December 2015.
The investigation relates to anonymous letters sent in June
2016 to members of the board and a senior executive that raised
concerns about a senior employee who had been recruited by
Barclays earlier that year, the bank said.
Barclays did not name the person but a person familiar with
the matter said the letters were about Tim Main, who Staley
worked with at JP Morgan. Main was hired in June 2016 as
chairman of Barclays' financial institutions group, based in New
Main could not immediately be reached for comment.
"Amongst other issues, the letters raised concerns of a
personal nature about the senior employee, Mr 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," Barclays said in its statement.
After being given a copy of the first letter and made aware
of the second, Staley asked the bank's group information
security (GIS) team attempt to identify the author or authors of
"Mr Staley considered that the letters were an unfair
personal attack on the senior employee," the bank said.
Staley was told it was not appropriate to try to identify
the author or authors. But in July 2016 he asked if the issue
had been cleared. Following this, he had an "honestly held, but
mistaken, belief was that he had clearance to identify the
author of one of the letters", the bank said.
GIS asked for assistance from a US law enforcement agency in
identifying the author, but it was unsuccessful and no further
steps were taken to do so after that.
Main was hired from Evercore Partners, where he was senior
managing director responsible for coverage of financial services
clients. He previously spent more than 20 years at JP Morgan
running its equity capital markets and FIG business acting as
in-house adviser on the bank's own deals.
He was one of several senior people that Barclays has hired
from JP Morgan since Staley's arrival. Seven of the British
bank's senior executives previously worked at JP Morgan.
SYSTEMS & CONTROLS
UK regulators are also looking at Barclays' systems and
controls and culture relating to whistleblowing, the bank said.
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 and also notified the regulators.
The board said Staley made an error in becoming involved
with, and not applying appropriate governance around, the
matter, and in taking action to attempt to identify the author
of the letter, the bank said.
"I have apologised to the Barclays board, and accepted its
conclusion that my personal actions in this matter were errors
on my part," Staley said.
The board will issue a formal written reprimand to Staley
and cut his variable compensation by an amount decided when the
regulatory investigations conclude. The board will also look
into the position of other employees involved in the incident,
the bank said.
Barclays shares dipped in early trading, but were up 0.1% by
The issue puts Barclays' culture under more scrutiny after a
number of scandals at the bank in recent years.
"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
Richard Boath, a senior former Barclays investment banker,
last year claimed he was fired from the bank for whistle
Boath said in court he was dismissed as a "direct response"
of what he told the Serious Fraud Office during an investigation
into the bank over its fundraising from Gulf investors during
the financial crisis. He is suing the bank at a London
employment tribunal in a pay dispute and for unfair dismissal
due to whistle blowing.
(Reporting by Steve Slater)