Barclays CEO Whistle-Blower Verdict Is Said to Be Delayed Again
(Bloomberg) -- U.K. regulators investigating Barclays Plc Chief Executive Officer Jes Staley’s attempts to unmask a whistle-blower have pushed back their decision a second time, with the probe now expected to be concluded early 2018, people with knowledge of the process said.
The delay comes as investigators at the Financial Conduct Authority are taking longer than expected to complete their review, said one of the people, who asked not to be identified speaking about a current case. The FCA had originally indicated it was targeting an October verdict, then pushed this back to December, Bloomberg News has previously reported.
Spokesmen for the bank and the FCA declined comment.
The whistle-blowing scandal is one of a series of unresolved issues hanging over the lender and its top executive, who may have to step down if the regulator deems him unfit to lead a financial institution. The British bank is in discussions with the U.S. Justice Department over a potential multi-billion-dollar fine for its role in selling toxic mortgage bonds that contributed to the financial crisis. In the U.K., four former Barclays executives will stand trial in 2019 on allegations they conspired to commit fraud over the bank’s 2008 fundraising with Qatar.
Probes of this nature can take years to complete. While banks usually hire law firms to conduct their own internal investigation into wrongdoing, the FCA can’t accept any report wholesale and must conduct its own inquiries. If the target agrees to settle with the FCA at an early stage, the parties can often take weeks going back and forth on the wording of a penalty notice.
Since the scandal broke, the FCA has interviewed the CEO twice, as well as other officials including Mike Ashley, the board member who supervises whistle-blowing complaints and Chief Operating Officer Paul Compton, Bloomberg News has reported. It’s not known what precisely is causing the repeated extensions of the probe.
Barclays reprimanded Staley in April after discovering he’d repeatedly tried to identify a whistle-blower, even after colleagues said it was inappropriate. The CEO may forfeit his entire 1.3 million-pound ($1.7 million) bonus.
The probe is the first test of the U.K.’s Senior Managers Regime, a set of rules introduced last year to restore personal liability to financial executives for bad or irresponsible behavior. The FCA has also placed an increasing emphasis on the importance of internal complaints, requiring firms to nominate a top executive or board member as a "whistle-blowers’ champion."
The whistle-blower controversy dates back to June 2016, when Barclays’ board received an anonymous letter raising concerns about one of Staley’s former JPMorgan Chase & Co. colleagues, Tim Main, Bloomberg News previously reported. The letters flagged issues of a personal nature about him and Staley’s role in dealing with those concerns at JPMorgan.
After learning about the letters, Staley made two attempts to discover who wrote them, despite being informed that it was inappropriate for him to do so after his first try. The second attempt was made after he thought the matter had been resolved. Barclays said in April that the board thought Staley “honestly, but mistakenly, believed” his actions were permitted.
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