Barclays’ £3.9m-a-year chief executive, Jes Staley, is to keep his job despite facing a reprimand and a fine from regulators over his attempts to unmask an internal whistleblower.
The size of the financial penalty that will be imposed on Staley – who received a bonus of more than £1m in 2017 – has not been disclosed.
The whistleblowing involved letters sent to the board in 2016 raising concerns about the recruitment of Tim Main as head of the bank’s financial institutions group in New York.
Staley tried to hunt down the author of the letters, using the bank’s internal security unit. In an email seen by the Guardian, he accused the letter writer of harassment and trying to “maliciously smear” Main, a friend and former colleague when Staley was at JP Morgan.
Barclays acknowledged that Staley will now be fined but said regulators are not alleging that he acted with a lack of integrity or that he lacks fitness and propriety to continue in his role as chief executive.
However, it is highly unusual for regulators to investigate and censure the boss of a major bank. In a statement issued jointly, the Financial Conduct Authority and the Prudential Regulation Authority said: “The FCA and the PRA have now concluded investigations into the CEO of Barclays and Barclays Bank plc. We have issued draft warning notices in respect to the CEO and will announce the outcome once this issue has reached a conclusion.”
The conclusion of the investigation lifts a major cloud that has been hanging over the bank since the allegations first emerged in April 2017. Shares in Barclays were up 0.5% at 215p on Friday afternoon after falling below 200p for much of 2017 when the investigation was ongoing.
Staley has 28 days to respond to the warning notices issued by the two regulators but the fine is likely to be regarded as closure on the episode. He has previously apologised, telling investors in 2017: “I made a mistake. I was trying to protect a vulnerable colleague. I should have left the organisation to handle it.”
Barclays Bank, which was also the subject of an inquiry, is not facing any enforcement action by the FCA or PRA.
“However, [the regulators] have proposed that each of Barclays Bank plc and Barclays Bank UK plc will be subject to requirements to report to the FCA and PRA on certain aspects of their whistleblowing programmes,” the lender said.
“Barclays continues to provide information to, and cooperate with, authorities in the US with respect to this matter,” it added. The bank stressed, however, that regulators are not alleging that he acted with a lack of integrity or that he lacks fitness and propriety to continue in his role as chief executive.
Staley now has 28 days to respond to warning notices issued by the two regulators.
It is extremely rare for financial regulators to investigate and censure chief executives in the City.
Barclays announced to the stock market in April last year that Staley and the bank were under investigation by the FCA and the PRA for the affair. New York’s Department of Financial Services was also looking into Staley’s behaviour.
Staley wrote: “The allegations related to personal issues from many years ago, and the intent of the correspondents in airing all of this was, in my view, to maliciously smear this person.
Staley became chief executive in December 2015 at a time when the bank was scrambling to repair its reputation in the wake of the Libor-rigging crisis and other scandals.
This week, before the outcome of the regulators’ investigations became public, an influential advisory group – Institutional Shareholder Services – called for a vote in favour of Staley at next month’s AGM “even though it is not without concern for shareholders”.
Its support was based on views that the company and chief executive were cooperating with authorities and that the bank had strengthened its whistleblowing programme.
Barclays said in April 2017 that its internal investigation, led by the law firm Simmons & Simmons, had concluded that Staley acted “honestly but mistakenly” in trying to track down the authors of the letters. However, Barclays conceded it was a serious offence that would lead to its chief executive receiving a formal written reprimand and a “very significant” cut to his bonus.
Staley’s misconduct was the focus of last year’s AGM, when shareholders fired a warning shot at the banking chief, with more than 16% of votes cast failing to back his re-election. Nearly 14% abstained and 2.4% voted against – even as Staley issued an apology to shareholders at the meeting.
