Barclays C.E.O. Investigated Over Treatment of Whistle-Blower
John McFarlane, the bank’s chairman, personally chastised Mr. Staley, saying he was “very disappointed.”
The chain of events began last summer after Tim Main left the boutique investment bank Evercore Partners to join Barclays, where Mr. Staley, a friend and a former boss at JPMorgan, had recently become chief executive. At JPMorgan, Mr. Main had spearheaded the bank’s dealings with other financial institutions, including with the American International Group during the 2008 financial crisis.
For Mr. Staley, Mr. Main, who was known for his team-building skills at JPMorgan, seemed like a great hire.
“Tim was a star here at Evercore,” Roger C. Altman, the firm’s founder, said on Monday. “He had everyone’s respect and was exceedingly successful. We tried mightily to keep him when Barclays came calling.”
But leave Mr. Main did, apparently lured by a new and larger platform at Barclays — a British bank that also has significant operations in New York — and by the chance to collaborate again with Mr. Staley.
But a month after his hiring, an anonymous whistle-blower sent letters to officials at Barclays that cited erratic behavior by Mr. Main when he was at JPMorgan, according to a person briefed on the letters. Two people who had worked with Mr. Main while at JPMorgan confirmed that he had acted erratically for a period of a time.
Barclays did not disclose the substance of the whistle-blower’s letter.
When he learned of the letter, Mr. Staley apparently took umbrage.
“The allegations related to personal issues from many years ago,” Mr. Staley wrote in an email to employees on Monday, “and the intent of the correspondents in airing all of this was, in my view, to maliciously smear this person.”
Hoping to uncover the name of the writer and implore that person to “stop the harassment,” as he described it in the letter, Mr. Staley twice asked Barclays’s internal security team to track the writer down. But the inquiry was not successful.
Barclays ultimately disregarded the whistle-blower’s objections and kept Mr. Main in his job.
Through representatives, both Mr. Main and Mr. Staley declined to comment.
“I have apologized to the Barclays board and accepted its conclusion that my personal actions in this matter were errors on my part,” Mr. Staley said in a statement. “I will also accept whatever sanction it deems appropriate. I will cooperate fully with the Financial Conduct Authority and the Prudential Regulatory Authority, which are now both examining this matter.”
Mr. Staley’s defenders say he was showing loyalty to a friend facing an unwarranted attack based on dated information. But critics say his actions crossed the line for any public company and underscored the difficulty of whistle-blowing in general.
“Whistle-blowers are typically treated horribly, even in the government, let alone in the private sector,” said Jeffrey Pfeffer, a professor of organizational behavior at Stanford’s Graduate School of Business. “People don’t like to have problems pointed out.”
The investigation by regulators is an embarrassment for Barclays, whose reputation has been hit hard in Britain since 2012, when it agreed to pay $450 million in penalties to settle accusations that it manipulated the London interbank offered rate, or Libor, the interest rate at which banks lend to one another.
It was the first of 11 banks to settle with regulators, and the scandal cost Robert E. Diamond Jr., then the chief executive and also an American, his job. His replacement, Antony Jenkins, was pushed out after three years amid criticism that he had not revived the ailing bank fast enough.
Soon after joining Barclays late in 2015, Mr. Staley initiated a major restructuring effort. He sold the bank’s Africa unit and built up its investment banking in the United States and Britain. Despite a strong start at the company, where some returns have improved, he has not fully proved himself yet.
And he might not have found himself under investigation if not for a second whistle-blower. In January, an employee at Barclays contacted its outside directors — in other words, all except for Mr. Staley and Tushar Morzaria, a fellow JPMorgan alumnus who is now Barclays’s finance director. In a letter, the Barclays employee pointed to flaws with the bank’s whistle-blower procedures. A case in point, according to that employee, was Mr. Staley’s attempts to unveil Mr. Main’s anonymous critic.
An outside law firm, Simmons & Simmons, was commissioned to investigate the concerns, and the British authorities were notified. Their conclusion: that Mr. Staley erred in seeking out the June whistle-blower, but that his belief that he had clearance to do so was an honest mistake.
It remains to be seen whether regulators will agree.
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