Harassment Woes Plague Standard Chartered, Even in Compliance
(Bloomberg) -- Top executives in charge of policing the behavior of Standard Chartered Plc’s 86,000 employees have themselves been disciplined or investigated for allegations of harassment or inappropriate conduct, according to people with knowledge of the matter.
In the past year, the head of anti-bribery and corruption left after the London-based bank probed allegations he had altered the performance review of a subordinate he was having an affair with, the people said. The bank’s global compliance chief stepped down after an investigation concluded that his language and behavior toward colleagues was inappropriate, according to an internal memo late Thursday.
Since his appointment in 2015, Chief Executive Officer Bill Winters has struggled to cleanse the culture of a bank under U.S. regulatory oversight for past violations of sanctions against Iran. He has repeatedly chastised managers for flouting ethics rules and acting as if they were “above the law.” In April, he sent another memo to senior staff calling out rampant misconduct at the emerging-markets lender.
“We continue to encounter incidents within our organization that do not meet the standards set by our own valued behaviors,” Winters wrote in the memo, excerpts of which were seen by Bloomberg News. “Examples range from managers creating an uncomfortable environment for colleagues, to incidents of harassment or discrimination. None of this is acceptable.”
The picture that emerges from interviews with more than half a dozen current and former employees, who requested anonymity to discuss personnel matters, is of a bank plagued by a toxic work culture that Winters and his board have so far been unable to fix. The problems extend beyond the compliance team to many businesses and regions, the people said. Winters underestimated the scale of the challenge when he promised to root out misbehavior, said one person with knowledge of the board’s deliberations.
Winters declined, through a spokesman, to comment. But Pam Walkden, head of human resources, said in an email to Bloomberg that the bank’s “culture is strong and our colleagues’ conduct is good with very few exceptions. When we identify shortcomings relative to our rigorous standards, which are inevitable in any large organization, we investigate thoroughly and fairly and take appropriate action. This is evident from recent actions we have taken.”
Standard Chartered’s compliance unit employs about 3,000 and governs everything from monitoring conduct to fighting financial crime in the 60 markets where it operates, from Macau to Colombia, according to a person familiar with the matter.
Matt Chapman, the global head of anti-bribery and corruption, was investigated for altering the performance review of a woman he was said to be having an affair with, according to people familiar with the matter. Chapman amended her manager’s review to give the woman a higher mark and gave her a promotion before he left last year, the people said. Chapman declined to comment, and the bank wouldn’t comment about the findings of its investigation or the reasons for Chapman’s departure.
Neil Barry, the global head of compliance, was initially suspended in March after complaints about inappropriate comments he allegedly made to colleagues, the people said. In one incident, he approached a woman sitting with a male colleague in the staff cafeteria and asked why she was socializing with him, according to people who were told about the exchange. Barry remarked that the woman was his and made a flippant comment about her companion’s sexuality, one of the people said.
Barry’s “managerial style, behavior and language towards some of his colleagues was inappropriate and not in line with our valued behaviors, although it fell short of warranting his dismissal,” according to an internal email to staff. Barry, who “has expressed his regret if any of his interactions with his colleagues caused upset or offence,” separately declined to comment to Bloomberg News.
Winters has been sending memos to staff with the rubric #knowtherules since April 2016. In the first, he decried a culture where senior managers flout ethics rules for their personal gain and “willfully disregard our policies.” After reports about the alleged behavior of Hollywood producer Harvey Weinstein surfaced last year, he sent an email reminding employees of their responsibilities to create a safe environment for colleagues, one person with knowledge of the memo said.
“I will not accept behavior that violates a person’s dignity or erodes their self-respect,” Winters warned in his April 2018 memo. “We will take all necessary steps to prevent further incidents and to protect and support victims.”
Another division of Standard Chartered where there have been allegations of misconduct is the private bank, which manages the assets of the firm’s high-net-worth clients. At least three women requested transfers out of the unit after complaining about verbal abuse, racist comments and bullying, according to people familiar with the matter.
The bank also has conducted an investigation into expense-account fraud at the private and investment-banking units across Asia, Africa and the Middle East, some of the people said. It uncovered dozens of cases in each region dating back to 2015, according to people with knowledge of the probe.
Some Hong Kong employees were found to have spent tens of thousands of dollars on their corporate credit cards on gifts and entertainment, from Louis Vuitton handbags to karaoke nights, the people said. Their expenses were approved by senior managers, even when receipts were missing or there was little client justification, the people said.
In one of the most egregious cases, a personal assistant who earned less than $50,000 a year racked up about HK$3 million ($380,000) in expenses over two years and was even using her manager’s computer to approve personal loans, one of the people said. She was caught and fired, while her boss received a warning.
Standard Chartered’s efforts to crack down on misconduct have themselves led to complaints of misconduct. General Counsel David Fein set up a team of former spies, FBI detectives, regulators and compliance officers to catch those who breached the bank’s rules against harassment, outside business interests, close financial dealings with co-workers and excessive expenses.
But members of the team overstepped the mark in at least three cases, exaggerating evidence, misleading witnesses and improperly documenting interviews, according to people involved in the crackdown.
In one case, the bank reached a monetary settlement with Salar Khan, a former head of corporate and institutional banking in Pakistan, after accusing him of misusing company resources, the people said. When Khan challenged the allegations -- which would have seen him lose compensation such as deferred shares -- the only evidence investigators could provide was that his secretary occasionally cashed checks for him, they said.
Khan didn’t respond to requests for comment through LinkedIn.
A spokesman for the bank, who declined to make Fein available for an interview, denied that the investigative team had acted improperly.
©2018 Bloomberg L.P.