Barclay’s CEO Must Pay $868,501 for Tracking Down the Identity of a Whistleblower

Jes Staley, the CEO of Barclay’s was incensed about the content of an anonymous letter than bank had received from “John Q. Public,” expressing concerns about a hire that Mr. Staley had made of a former colleague of his at Chase Bank. Mr. Staley felt that allegations in the letter were incorrect and asked that the individual’s identity be disclosed. About that time, a second letter came in with similar content to the first.

The British Financial Conduct Authority(FCA) imposed the large fine and Barclay’s board took away 500,000 pounds from Mr. Staley’s annual bonus. And the story is not over. New York state authorities are still investigating.

Mr. Staley’s initial defense was that the decision to intrude into the investigation of the letters were made at lower level, without his knowledge. He then progressed to the belief that the letter was from an outsider and therefore not a whistleblower situation and that he could know the identity. The FCA found that the identical nature of the two letters made it likely that they came from inside the organization. However, without talking with compliance, the board, or even the executive committee, Mr. Staley told security that he was cleared for knowing the identity. Those within Barclay’s then told the board about the unmasking of the whistleblower, and the board reported the incident to regulators. Oh, what a tangled web.

The fine is one of the first fines imposed by the FCA under new British laws intended to hold financial officers personally accountable for misconduct. Some view the fine as a pittance, while others have applauded, noting that the level of the fine was nearly 1/4 of Mr. Staley’s annual pay.

The offenses by Mr. Staley were serious. He apologized for his mistakes and labeled his actions “inappropriate.” The real damage will take some time to repair. He is still at Barclay’s, still in charge, and he unmasked, without approval by compliance or the board, the author of an anonymous report. That type of conduct in a CEO does chill the ethical culture.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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