Barclays Banker Secretly Taped Saying He Shredded Key Report

(Bloomberg) -- A former Barclays Plc top executive -- who’s challenging a proposed ban from senior jobs in the finance industry -- was secretly recorded saying he destroyed a report that criticized management, a London court heard Tuesday.

Andrew Tinney told Duncan Perry, then one of the bank’s most senior lawyers, that he’d “read and then destroyed” a report that criticized the management of the Barclays Wealth Americas unit, according to court filings from the U.K.’s Financial Conduct Authority. The discussion happened over a Friday drink in a Canary Wharf pub in November 2012 that Perry was taping, the filings said.

“Mr. Perry wore covert recording equipment,” FCA lawyer Ben Strong told the tribunal on the first morning of a hearing that’s scheduled for eight days. “Mr. Tinney told Mr. Perry he’d destroyed the document.”

Tinney, the global chief operating officer of Barclays Wealth and Investment Management from 2010 to 2012, is in a London court to fight the FCA’s 2016 decision to ban him from holding senior roles in finance because he’d misled colleagues about the document.

The former executive’s attorney says he never destroyed his copy, and according to the FCA, Tinney alleges that the regulator was fooled by Perry, who had been global general counsel for Barclays Wealth.

The FCA said nothing in its decision to ban him depended on Perry’s evidence. The regulator said in its decision to ban Tinney that a small number of people were told about the report and that Tinney had agreed with his manager that its contents should be acted on.

‘Freelance’ Probe

Tinney had intended to shred the document thinking it had served its purpose, his lawyer Guy Philipps said. He thought he’d shredded it but later found it in his house, Philipps said. He accused Perry of carrying out a “freelance investigation” of his own “malicious” accusations against Tinney.

There was always another copy available from its authors, “which ultimately Mr. Tinney facilitated,” another of Tinney’s lawyers, Harvey Knight, said by email Tuesday. Tinney said in his court filings that the FCA’s finding that he suppressed the report is “astonishing” and “devoid of logic and sense.”

An FCA spokesman declined to comment. A spokesman for Barclays -- which isn’t a party to the lawsuit -- didn’t immediately comment. Perry didn’t immediately respond to a message sent to him on LinkedIn.

‘Actively Hostile’

The report, which was carried out by an external consultant and formed part of a wider remediation program at the bank, was being conducted to address issues flagged in a review by the U.S. Securities and Exchange Commission, according to the FCA. The document said Barclays Wealth Americas pursued “revenue at all costs” and was “actively hostile to compliance,” and should consider replacing some of its senior management.

Barclays was fined $15 million in 2014 by the SEC for poor oversight in its wealth-management business, which it later sold to Stifel Financial Corp. The debacle adds to a string of compliance issues at Barclays over the last decade.

The bank paid billions in fines for manipulating the foreign-exchange market as well as Libor, a key benchmark tied to the value of many financial products. Chief Executive Officer, Jes Staley, is also awaiting the outcome of an FCA investigation into his own conduct involving a whistle-blower. 

‘Lacks Integrity’

Tinney’s conduct shows he “lacks integrity,” Strong told the tribunal Tuesday.

“In circumstances where an honest and straightforward person would have drawn attention” to the report, Tinney “repeatedly failed to refer to the report, denied its existence and described it in misleading terms intending to avoid it having to be produced internally or externally,” the FCA said in its court papers.

Tinney’s actions were “wholly contrary” to an attempt to build trust in the bank and improve its culture following the Libor scandal and the departure of CEO Bob Diamond, it said.

But Tinney said in his court papers that his situation is “a very troubling case.”

Tinney emailed a document to his chief of staff David Mason, and Perry, in September 2012 denying the existence of a “Wealth Cultural Audit Report,” according to the FCA’s filings. Philipps said that document was sent in response to an email from a whistleblower which said Justin Doll, BWA’s chief operating officer, had suppressed a “cultural audit report.”

Whistleblower

Philipps said the FCA allegations are undercut by its contention that that Tinney purposely hadn’t shared the report with anyone at Barclays. If that’s true, the attorney says, Tinney wouldn’t have thought Doll had seen it, and couldn’t have believed that the whistleblower was referring to the report that had been sent to his house.

“If Mr. Tinney honestly believed the whistleblower wasn’t referring” to that report, then the FCA’s case fails, Philipps said.

A report in a U.K. newspaper that said Tinney had “secretly shredded a bombshell report” was wrong, the former executive said in his court filings. He said the bank had determined that Perry had leaked a report to the newspaper, but that Perry denied doing so.

Tinney is scheduled to give evidence on January 25 and 26, in a case that will also include testimony from several of the bank’s senior managers.

Tinney’s court filings said the FCA had acknowledged he hadn’t covered up the report when he first received it in March 2012 but said he’d sought to suppress it in late September and early December that year. Tinney had “no reason to suppose” that a report he was asked about in September and December 2012 was the critical report.

The report’s contents “would be highly toxic if they came to light in employment-related litigation,” Tinney said in his filings. Part of the FCA’s case “verges on the vexatious,” he said.

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