Yahoo Finance Barclays boss Jes Staley fined by City watchdogs over whistleblowing scandal
Barclays chief Jes Staley can keep his job after City watchdogs fined him for trying to unmask a whistleblower two years ago, but stopped short of barring him from running a bank.
The verdict dismayed whistleblowing lawyers, who accused the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) of failing their first big test of rules designed to police top bank bosses’ conduct and help prevent another financial crisis.
“This was an opportunity for UK regulators to say they will protect whistleblowers, and they blew it,” said Erika Kelton, a partner and whistleblowing attorney at Phillips and Cohen.
But the outcome delivers a boost to Barclays as it works to fend off a likely campaign to overhaul it by New York-based corporate raider Edward Bramson.
It also clears a further misconduct headache for the bank, soon after it agreed a $2bn (£1.4bn) fine for mis-selling toxic mortgage products in the US last month - a lower figure than expected.
The former JP Morgan banker Mr Staley faces a yet-to-be-determined financial penalty for failing to act with due skill, care and diligence for instructing his security team to track down the source of personal allegations made about a colleague in 2016.
Mr Staley apologised last year for his “mistake” in twice trying to identify the whistleblower.
He was cleared of the more serious charge of acting with “a lack of integrity”, which could have seen him stripped of the right to lead the bank.
Mr Staley has 28 days to appeal. Barclays had previously said it would lower Mr Staley’s pay or bonuses following the indiscretion, but is waiting until the fine is decided before finalising this.
The bank has not been sanctioned, though it will now be required to report to the watchdogs on “certain aspects” of its whistleblowing policies.
The probe was seen as a serious test of the FCA’s senior manager regime and whistleblowers’ champion programmes.
“The two programmes flouted here are linchpins of regulators’ response to the financial crisis. The signal that’s been sent out is they are not worth the paper they are written on," said Mary Inman, partner at Constantine Cannon.
Barclays’s own investigation found Staley "honestly, but mistakenly, believed" his actions were permitted.
“The Barclays board continues to have unanimous confidence in Mr Staley and continues to recommend his re-election as a director at the Barclays annual general meeting on 1 May 2018,” the bank said.
The FCA and PRA said: “We have issued draft warning notices in respect to the CEO and will announce the outcome once this issue has reached a conclusion.”
