Barclays chief fined in whistle-blowing probe

Bloomberg

Barclays Plc Chief Executive Officer Jes Staley survived a year-long regulatory probe into his attempts to unmask a whistle-blower, escaping with a fine instead of losing his job.
While the UK Financial Conduct Authority and Prudential Regulation Authority will impose a financial penalty on Staley for failing to behave “with due skill, care and diligence” in the scandal, they stopped short of the more serious charge that “he acted with a lack of integrity or that he lacks fitness and propriety to continue to perform his role as group chief executive officer,” the bank said in a statement.
Staley faces a penalty of between 1 million ($1.4 million) and 2 million pounds, including a bonus clawback from Barclays, according to a person with knowledge of the matter. Barclays, which has previously indicated that it might retrieve all of Staley’s 1.3 million-pound bonus for 2016, said its board has “unanimous confidence” in its CEO.
Regulators have placed whistle-blowing, and the protection of those raising the alarm, at the heart of efforts to avoid misconduct and scandals since the financial crisis. Compliance professionals were split on whether the fine was enough to deter other CEOs from future misconduct, or whether Staley got away with a slap on the wrist.
“This is as far as regulators could have gone without causing even more turmoil at Barclays — they’ve clearly chosen their words very, very carefully,” said Joanna Torode, a lawyer specialising in government enforcement at Ropes & Gray in London. “This is a shot across the bow of senior managers across the City. At Staley’s level, bankers are thinking about their reputation and legacy, not money or fines.”
The lender reprimanded its CEO in April last year after discovering he had twice tried to identify a whistle-blower. Staley has also come under increasing pressure in his third year in charge of the Britain’s second-largest lender. In March, activist investor Edward Bramson bought a stake in Barclays with the aim of pushing for strategic change to lift the shares.
“Overall, this is probably as good an outcome as could have been expected,” wrote Gary Greenwood, an analyst at Shore Capital with a buy rating on the company. Barclays’s shares were up 0.5 percent to 215.2 pence at 2:06 p.m. in London trading.
The whistle-blowing controversy dates back to June 2016, when Barclays’s board received an anonymous letter raising concerns about the recruitment of one of Staley’s former colleagues at JPMorgan Chase & Co., Tim Main. The contact flagged issues of a personal nature regarding Main and Staley’s role in dealing with those concerns at JPMorgan.
After learning about the matter, Staley attempted to identify the whistle-blower, despite being informed that it was inappropriate for him to do so. Barclays’s own investigation had found Staley “honestly, but mistakenly, believed” his actions were permitted.
“I’m gravely disappointed with the FCA’s response,” said Mary Inman, who is a partner at Constantine Cannon, a US firm that started a whistle-blower practice in Europe last year.