UK Regulators Probe Barclays CEO Over Whistleblower -- 2nd Update
April 10 2017 - 4:50AM
Dow Jones News
By Max Colchester
LONDON--U.K. regulators have begun an investigation into
Barclays PLC Chief Executive Jes Staley over his attempts to unmask
a whistleblower who raised questions over one of the bank's
hires.
The U.K.'s Prudential Regulation Authority and Financial Conduct
Authority are probing both Mr. Staley and the bank over its
treatment of whistleblowers after Mr. Staley tried to identify the
source of an anonymous letter that criticized someone he recruited,
Barclays said in a statement Monday. The bank added that it had
issued a formal reprimand to Mr. Staley and will make a
"significant" cut to his bonus. It is also conducting its own
review into Barclays's controls.
The hire in question was Tim Main, a former colleague of Mr.
Staley's who was brought in from Evercore Partners to chair
Barclays' financial institutions group, according to a person
familiar with the matter. Mr. Main couldn't be immediately reached
for comment.
"I have apologized to the Barclays board, and accepted its
conclusion that my personal actions in this matter were errors on
my part," Mr. Staley said in a statement.
In June 2016, Barclays's board and a senior executive received
anonymous letters raising concerns over Mr. Main's hire that month
in New York. Mr. Staley initially asked Barclays's internal
security team to try to identify the authors of the letter,
believing the accusations were unfair. He was told that he wasn't
permitted to do so. However in July he followed up the request and
the security team received help from a government authority. The
whistleblower's identity was never revealed, the bank says.
A Barclays employee flagged the matter to the bank's board in
early 2017. The board then commissioned its own probe and shared
its findings with the U.K. regulators. Barclays said an internal
investigation into Mr. Staley's actions concluded that he honestly,
but mistakenly, believed that it was permissible to identify the
author of the letter.
The issue is another knock to Barclays as it tries to overhaul
its image after years of scandals. "This latest revelation
represents a very significant embarrassment for the board as it
tries to rebuild the group's reputation," said Gary Greenwood, an
analyst at Shore Capital.
Since his arrival in late 2015, Mr. Staley has refreshed the
bank's management team, bringing in a series of new executives.
Many of them were from his alma mater, J.P. Morgan Chase & Co.
He has replaced the bank's chief risk officer, chief operating
officer and the head of the lender's investment bank. Some within
Barclays grumbled that Mr. Staley wasn't giving insiders a fair
chance and leaning too heavily on J.P. Morgan, where he spent
nearly three decades of his career.
Barclays board said in a statement that they support Mr.
Staley's reappointment at the bank's annual shareholder meeting in
May. "I am personally very disappointed," Chairman John McFarlane
said in a statement.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
April 10, 2017 04:35 ET (08:35 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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