Oh no. Here we go again.
That will have been the reaction of many stakeholders in Barclays – past and present employees, investors and customers – following news that the bank and its chief executive, Jes Staley, are being investigated by the UK’s two main financial regulators.
Mr Staley, who is generally regarded as having done a good job since he became chief executive of the bank in December 2015, is hardly the first Barclays boss to become embroiled in a high-profile regulatory investigation.
His predecessor-but-one, Bob Diamond, was forced to step down in July 2012 after the bank admitted to rigging Libor and other money market rates.
Both Mr Diamond and his immediate predecessor, John Varley, have been interviewed by the Serious Fraud Office (SFO) over fees paid by Barclays ahead of the bank’s emergency £7.3bn fundraising in 2008, at the height of the financial crisis, a refinancing that helped it avoid receiving a state bail-out.
The SFO has yet to decide whether to bring any charges.
The behaviour of which Mr Staley stands accused is highly embarrassing because, even before he joined the bank, the Bostonian was stressing the need for Barclays staffers to behave ethically.
More on Finance
- Bitcoin boom or bust: Is cryptocurrency changing the world?
- UK fintech star WorldRemit transfers in Corcoran as new boss
- London Stock Exchange investor moves to oust chairman
- Universal Basic Income: Finland shows how salary for all works
- RBS restructuring unit probed over claims it profited from stricken firms
- Sky Data finds growing number of 18-34-year-olds worried about their finances
In an internal memo, circulated between the announcement of his appointment and his taking up the post, Mr Staley told Barclays employees: “There can be no retreat from becoming a values-driven organisation which conducts itself with integrity at all times.”
It is likely that the Financial Conduct Authority and Prudential Regulation Authority, whose investigations are at an early stage, will take a dim view of Mr Staley’s actions.
Since the financial crisis, regulators everywhere have worked harder to encourage whistleblowers to come forward, with the FCA and the PRA introducing new rules in September last year that required some regulated firms to appoint a senior manager to act as a ‘whistleblowers champion’ and also to set in place formal arrangements on how to deal with whistleblowers in their organisation.
There has also been a debate as to whether the regulators could go further and offer financial incentives to whistleblowers as the main US financial regulator, the Securities & Exchange Commission (SEC), does.
Yet the number of people working in the financial services industry who come forward as whistleblowers has been falling. A report by law firm Pinsent Masons last autumn revealed that the number of whistleblowers sending reports to the FCA during 2015 was down a fifth on the total during 2014.
This may be because people who do come forward with information about alleged wrongdoing in their organisations do so at huge risk to themselves and their career prospects. There have been a series of high-profile cases in which whistleblowers have subsequently claimed unfair dismissal after being let go by the employer.
This has led to a degree of political heat for regulators. In August last year, the FCA – then run by Tracey McDermott – was heavily criticised by the Treasury Select Committee, whose chairman, Andrew Tyrie, accused the watchdog of not knowing how to properly deal with whistleblowers.
And all this at a time when companies outside the financial services sector have shown themselves to be adept at dealing with information provided by whistleblowers.
For example, Tesco chief executive Dave Lewis is seen as having come up with a textbook response when a whistleblower tipped him off – just weeks into the job – about accounting malpractices at the supermarket.
He immediately notified his board, called in lawyers and accountants to investigate the matter, suspended eight senior managers at the company and passed on all relevant information to the FCA.
By comparison, Mr Staley’s attempt to unmask a whistleblower in his own organisation does not look good and is likely to be punished severely.
Under him and his predecessor, Antony Jenkins, Barclays has done a lot of good work in trying to clean up its act and put behind it previous scandals such as Libor-rigging.
That may all now count for nothing if future whistleblowers are deterred from coming forward.
- Remember the victims. Death row is filled with killers, not martyrs
- East Bay man freed from Death Row nearly 33 years after conviction
- Chicago Cop Says Department Punished Him For Refusing to Cover Up Shooting of Unarmed Teen
- Death-row inmate says cryptic last words before fight breaks out at execution
- Brett Kavanaugh Reiterates Cruel And Unusual Punishment What Makes Someone A True Kappa
- Florida Detention Center Expands, Packing In Migrant Children 'Like Sardines'
- Gavin Newsom to put moratorium on California death penalty
- Greene: Here’s how race played out in one of Colorado’s three capital convictions
- Mothers’ 26-year quest for justice takes them to state Supreme Court
- As Trump Criticizes California Death Penalty Moratorium, Some Republicans Cheer End to 'Failure' of Executions
Why Jes Staley is likely to be 'punished severely' in whistleblower row have 841 words, post on news.sky.com at April 10, 2017. This is cached page on Europe Breaking News. If you want remove this page, please contact us.