Barclays CEO fined over whistleblower retaliation; Constantine Cannon partner weighs in
Jes Staley, the CEO of the world’s 15th largest bank, has been fined over £640k by Britain’s financial regulators for trying to uncover the identity of an anonymous whistleblower. The fine represents under 15% of Staley’s 2016 compensation. The bank also retroactively decreased Staley’s 2016 bonus by £500k. The total £1.14M represents about a quarter of Staley’s 2016 compensation. Additionally, regulators decided not to ban Staley from banking over the scandal. He is the first CEO of a major financial institution be fined by financial regulators and also keep their job.
Regulators also announced that Staley received a 30% discount on the fine, which was originally about £900k, due to his cooperation with the investigation.
The bank, which has $1.6 trillion in assets, will also avoid any sanctions by the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority. It will have to tighten its whistleblowing systems and report annually on them to British regulators. The fine is the result of an investigation by regulators to improve accountability in the financial services sector. It is the first result of the probe to be announced publicly.
The events underlying the penalty happened in 2016, when Staley tried to track down a whistleblower who had written allegations to the Board of Directors accusing Staley of covering up personal problems of a friend who was recently hired by Barclays. Regulators received two anonymous letters, one from a shareholder and one from an employee. Staley did not try to identify the employee, knowing that was illegal, but did try to identify the shareholder. New rules that took effect in September 2016 broadened the definition of whistleblower to include persons other than company employees. Staley violated these new rules.
Constantine Cannon partner, Mary Inman, was quoted in the Financial Times, the Wall Street Journal, and Telegraph, and Reuters regarding the recent settlement. Inman, who is based in London and specializes in representing whistleblowers, called the fine “pitifully low.”