Barclays (BARC.L) chief executive Jes Staley is under investigation from financial regulators for attempting to unmask a whistleblower within the bank.
The attempt by Staley, which a legal investigation ordered by the bank found involved a U.S. law enforcement agency, was at odds with the company’s own policy. Barclays grants whistleblowers anonymity to prevent any retribution for their actions – in keeping with normal UK practice, Reuters report.
“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.
The board said it accepted Staley’s explanation that he was trying to protect a colleague from what he believed to be an unfair attack, will back his reappointment at the annual shareholder meeting on May 10.
Nonetheless, the investigation by the Financial Conduct Authority and the Prudential Regulation Authority casts a cloud over the bank.
“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 statement.
The investigation could take months to conclude, said one person familiar with the matter.
The probe into Staley’s conduct comes as the latest in a series of regulatory problems for the bank, which is still dealing with investigations into employees’ manipulation of the Libor benchmark interest rates.
“Given Barclays’ history of regulatory misdemeanors … this latest revelation represents a very significant embarrassment,” Gary Greenwood of Shore Capital wrote.
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 in December 2015, 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.
The regulators are now looking at Barclays’ systems and controls and culture relating to whistleblowing, the bank said.