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Barclays CEO Staley fined £642,430 over whistleblower case

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Staff Writer | May 11, 2018
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have together fined James Staley, Barclays Group CEO, a total of £642,430.
James Staley
Banking   Barclays is also now subject to special requirements
Staley failed to act with due skill, care and diligence in the way he acted in response to an anonymous letter received by Barclays in June 2016.

Barclays is also now subject to special requirements by which it must report annually to the regulators detailing how it handles whistleblowing, with personal attestations required from those Senior Managers responsible for the relevant systems and controls.

Staley attempted to identify the author of an anonymous letter received by Barclays in June 2016 that claimed to be from a Barclays shareholder. The letter contained various allegations, some of which concerned Staley.

Given his conflict Staley should have maintained an appropriate distance; he should not have taken steps to identify the author.

Staley should have explicitly consulted fully with those with expertise and responsibility for whistleblowing in Barclays and sought express confirmation from them that what he wanted to do was permissible. He failed to do this.

The investigation found this to be a breach of the requirement to act with due skill, care and diligence (Individual Conduct Rule 2) but not a breach of the requirement to act with integrity (Individual Conduct Rule 1). As CEO, Staley should have identified that:

This is the first case brought by the FCA and PRA under the Senior Managers Regime. The investigation found that Staley made serious errors of judgement.

While he made no personal gain in this instance, both regulators viewed his misconduct as sufficiently serious for each to impose a penalty of 10% of Staley’s relevant annual income.

Taking into account that he has settled at an early stage, Staley has been fined a combined sum of £642,430.

The FCA and PRA consider this to be appropriate and proportionate given the seniority of Staley and the potential impact of the breach. In addition Staley is censured by the publication of the regulators’ Final Notices.

In light of Staley’s actions above, the FCA and PRA have some concerns about the Firm’s whistleblowing systems and controls, and have concluded that these require enhanced monitoring and scrutiny.

Barclays is, therefore, now subject to requirements by which it must report annually to the FCA and PRA, including any whistleblowing cases involving allegations made against its Senior Managers and any cases where Barclays has sought to identify any anonymous whistleblowers.

Barclays’ Whistleblowers’ Champions, who are approved by the FCA and PRA under the Senior Managers Regime, will have to attest personally to the soundness of its whistleblowing systems and controls on an annual basis.

These measures, which apply to all cases until the end of 2020, are the first of their kind applied to a regulated firm in relation to whistleblowing. Barclays agreed to the requirements. They are published today by the FCA and PRA.


 

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