Barclays chief executive Jess Staley has been fined £642,430 for failing to act with due skill, care and diligence in response to a whistleblower incident.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) jointly fined Staley for attempting in 2016 to identify the author of an anonymous letter received by the bank that claimed to be from a Barclays shareholder.
This is the first case brought by the FCA and PRA under the Senior Managers Regime.
The letter contained various allegations, some of which concerned Staley. Given the chief executive’s conflict, the FCA said he should have maintained an appropriate distance and should not have taken steps to identify the author.
The FCA also said 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 but not a breach of the requirement to act with integrity. As chief executive, the FCA said Staley should have identified that:
• He had a conflict of interest in relation to the letter, and needed to maintain an appropriate distance from group compliance’s investigation;
• There was a risk he would not be able to exercise impartial judgement over how Barclays should respond;
• Once the complaint was in the hands of the group compliance team, it was important that group compliance retained control over its investigation.
The regulators have also subjected the bank to special requirements by which it must report annually to the regulators, detailing how it handles whistleblowing, with personal attestations required from senior managers responsible for relevant systems and controls.
Mark Steward, FCA executive director of enforcement and market oversight, said: “Given the crucial role of the chief executive, the standard of due skill, care and diligence is more demanding than for other employees.
"Whistleblowers play a vital role in exposing poor practice and misconduct in the financial services sector. It is critical that individuals are able to speak up anonymously and without fear of retaliation if they want to raise concerns.”