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.
