Why is Barclays in trouble with the Bank of England again and what happens next?

why-is-barclays-in-trouble-with-the-bank-of-england-again-and-what-happens-next

Why is Barclays in trouble with the Bank of England again and what happens next?

At issue are chief executive Jes Staley’s attempts to learn the identity of a whistleblower. The bank has revealed that in June 2016 board members received an anonymous letter and a senior executive also received a second anonymous letter “raising concerns about a senior employee who had been recruited by Barclays earlier that year”.

Barclays said: “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.”

The letters were investigated by Barclays’ compliance department as whistleblows. Under the rules laid down by City watchdog the Financial Conduct Authority (FCA), if a whistleblower asks for anonymity a firm must respect their request.

However, Mr Staley asked the bank’s group information security (GIS) team to try and unmask the authors of the letters. The lender said that this was because he “considered that the letters was an unfair personal attack on a senior employee”. Having been told that this was inappropriate, the GIS team and Mr Staley stopped.

staley
Jes Staley, the chief executive of Barclays

A month later, however, Mr Staley “enquired whether the whistleblowing issue with the letters had been cleared”. The bank said that “following this, Mr Staley’s honestly held, but mistaken, belief was that he had clearance to identify the author of one of the letters”.

He then once again tasked the GIS team to find out who wrote the letters. The GIS team went as far to to enlist the help of a US law enforcement agency to help it investigate the matter but were ultimately unsuccessful in unmasking the author.

The Barclays board learnt of Mr Staley’s attempt to identify the author early this year following “a concern raised by an employee regarding amongst other matters the adequacy of Barclays whistleblowing procedures”. It appointed law firm Simmons & Simmons to investigate the matter, an internal probe that was led by the bank’s deputy chairman, Sir Gerry Grimstone.

The bank also notified authorities, including the FCA and the Bank of England’s Prudential Regulation Authority (PRA). The New York Department for Financial Services is also reportedly looking into the matter.

Barclays said: “The investigation by Simmons & Simmons found, and the board has concluded, that Mr Staley honestly, but mistakenly, believed that it was permissible to identify the author of the letter.

“However, the board has concluded that Mr 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.”

Mr Staley has apologised to the board. John McFarlane, Barclays’ chairman, said that it “has accepted his explanation that he was trying to protect a colleague who had experienced personal difficulties in the past from what he believed to be an unfair attack, and has accepted his apology”.

Source: The Telegraph

Author: Ben Martin

 

 

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