Tue, 21st May 2019
Barclays is faced with a $15 million fine from the New York regulator, over attempts by the Chief Executive and senior management to unmask a whistleblower. The State Department of Financial Services in New York has investigated the bank and found that there were shortcomings in the bank’s governance, corporate culture and controls that related to whistleblowing.
The fine brings to an end an investigation into the efforts of Chief Executive Jes Staley to identify a whistleblower who wrote to the board over the hiring of Tim Main as the head of the financial institutions group in New York.
Staley enlisted the help of the bank’s internal security unit to attempt to track down the author of the letters. The regulator says that the CEO was attempting to protect a senior executive from unwanted and unfair publicity, and that he was defending his right to recruit high level people that he chose. The regulator accused senior management of failing to follow the bank’s whistleblowing procedures, and said that the probe showed that efforts to change the culture of the business were not anywhere near complete.
Whistleblower protections exist to ensure that employees feel safe and able to escalate issues of concern. The protections help to uncover, and address, wrongdoing in big companies. The regulator appreciated Staley’s attempts to take responsibility for what he did, and to apologize to employees. Staley has agreed to oversee an independent, effective whistleblowing function, and the fine is a part of the remediation process. The UK financial watchdog has fined Staley £642,430 for the way that Staley acted regarding the letter.