1 00:00:00,040 --> 00:00:02,000 Speaker 1: When he became CEO of Barclays a year and a 2 00:00:02,040 --> 00:00:05,840 Speaker 1: half ago. His UH Jeff Stelly's agenda focused on restoring 3 00:00:05,880 --> 00:00:10,400 Speaker 1: Barclay's reputation after scandals over libor, rigging gaming currency markets, 4 00:00:10,400 --> 00:00:13,680 Speaker 1: and selling customers insurance products that they didn't need. But 5 00:00:13,760 --> 00:00:16,479 Speaker 1: now he faces a scandal of his own making, after 6 00:00:16,560 --> 00:00:19,840 Speaker 1: trice twice trying to unmask an anonymous whistle blower last year. 7 00:00:20,440 --> 00:00:23,760 Speaker 1: Steely's apologized, but Barclay's board cut is paid by an 8 00:00:23,760 --> 00:00:27,320 Speaker 1: amount they call significant, and the UK's Financial Conduct Authority 9 00:00:27,440 --> 00:00:30,800 Speaker 1: is investigating Staley's conduct. Here to talk to us about 10 00:00:31,360 --> 00:00:36,400 Speaker 1: what's going on with Mr Staley is Bloomberg News investigative 11 00:00:36,440 --> 00:00:38,800 Speaker 1: reporter Greg Farrell, who has been following this story for 12 00:00:38,840 --> 00:00:42,360 Speaker 1: a while. Now, Greg, let's start out with what it 13 00:00:42,520 --> 00:00:48,080 Speaker 1: is that Jess Stalely did here that that was problematic. Um, Well, Michael, 14 00:00:48,240 --> 00:00:52,320 Speaker 1: there are whistlebower protections in the us UH, certainly as 15 00:00:52,320 --> 00:00:54,600 Speaker 1: part of the Dodd Frank law over here, but there 16 00:00:54,600 --> 00:00:58,880 Speaker 1: are comparable rules in the UK that protect anyone who 17 00:00:58,920 --> 00:01:02,080 Speaker 1: wants to remain anonymous or not get retaliated against for 18 00:01:02,240 --> 00:01:05,640 Speaker 1: calling a board of director's attention to what that individual 19 00:01:05,720 --> 00:01:09,119 Speaker 1: perceives is wrongdoing of some kind. UM. Now, the vast 20 00:01:09,160 --> 00:01:13,080 Speaker 1: majority of whistleblower complaints are actually you know, crank or 21 00:01:13,440 --> 00:01:17,920 Speaker 1: inaccurate or self serving. But the law as codified and 22 00:01:17,959 --> 00:01:22,600 Speaker 1: Dodd Frank is designed to protect UH protect people, give 23 00:01:22,680 --> 00:01:25,880 Speaker 1: them the space to UH to send in those complaints 24 00:01:25,880 --> 00:01:27,440 Speaker 1: on the off chance there is a real one, they 25 00:01:27,440 --> 00:01:30,760 Speaker 1: won't be retaliated against. And what happened here, apparently, according 26 00:01:30,760 --> 00:01:34,800 Speaker 1: to the Barkley's disclosure, is that the CEO, Just Daley, 27 00:01:35,360 --> 00:01:38,240 Speaker 1: made an attempt and a second attempt to find out 28 00:01:38,280 --> 00:01:43,640 Speaker 1: who this individual was. So Staley has admitted his error. 29 00:01:43,640 --> 00:01:48,600 Speaker 1: I understand and apologize. Why is the UK Financial Conduct 30 00:01:48,640 --> 00:01:54,800 Speaker 1: Authority and other UK regulatory agencies investigating well, I think 31 00:01:55,080 --> 00:01:59,240 Speaker 1: the main point here and what the regulatory authorities do there, 32 00:01:59,320 --> 00:02:03,120 Speaker 1: And don't forget DFS. New York's Department of Financial Services 33 00:02:03,200 --> 00:02:05,800 Speaker 1: is also looking at it over here. UH is from 34 00:02:05,880 --> 00:02:08,840 Speaker 1: a compliance and regulatory point of view. UH, this has 35 00:02:08,880 --> 00:02:11,639 Speaker 1: nothing to do with you know, financial matters. It has 36 00:02:11,680 --> 00:02:15,120 Speaker 1: to do with the soundness of the bank's compliance and 37 00:02:15,200 --> 00:02:20,000 Speaker 1: risk practices. And this whistleblower complaint complaint UH and the 38 00:02:20,240 --> 00:02:23,280 Speaker 1: you know, the mismanagement of it is you know, evidence 39 00:02:23,360 --> 00:02:27,880 Speaker 1: that Barkley's compliance unit wasn't effective in this particular matter. 40 00:02:28,120 --> 00:02:30,639 Speaker 1: So that's why, at least as of now, uh, it's 41 00:02:30,720 --> 00:02:36,600 Speaker 1: a you know, prudential or regulatory oversight problem. Well, why 42 00:02:36,680 --> 00:02:39,760 Speaker 1: would a CEO like Jess Staley who comes in trying 43 00:02:39,800 --> 00:02:42,240 Speaker 1: to sort of clean up the reputation of a bank, 44 00:02:42,400 --> 00:02:46,040 Speaker 1: I think that it's okay to try to get around 45 00:02:46,040 --> 00:02:51,200 Speaker 1: whistleblower protections in this way. Well, according to the Barkley statement, um, uh, 46 00:02:51,280 --> 00:02:54,000 Speaker 1: Staley the second time around thought that the matter had 47 00:02:54,040 --> 00:02:57,920 Speaker 1: passed or said you know that, uh, that he thought 48 00:02:57,919 --> 00:02:59,959 Speaker 1: it was okay for him to try a second time. 49 00:03:00,400 --> 00:03:04,240 Speaker 1: So you know that clearly even if that and we 50 00:03:04,280 --> 00:03:07,440 Speaker 1: assume that's true, but that still shows a weakness in 51 00:03:07,480 --> 00:03:09,760 Speaker 1: the in the in the oversight process that it wasn't 52 00:03:09,800 --> 00:03:12,080 Speaker 1: made clear to him that no, this is uh you know, 53 00:03:12,160 --> 00:03:15,360 Speaker 1: this is an area you can't go into. Um. Another 54 00:03:15,440 --> 00:03:19,160 Speaker 1: aspect of the Barclay's disclosure is that, uh, you know, 55 00:03:19,160 --> 00:03:21,400 Speaker 1: it was viewed as a personal attack on someone who's 56 00:03:21,400 --> 00:03:24,600 Speaker 1: a senior executive at the bank. And again, it doesn't 57 00:03:24,639 --> 00:03:27,280 Speaker 1: matter if there's any merit to it. Uh, it's you know, 58 00:03:27,400 --> 00:03:29,680 Speaker 1: obviously crossing the line to go and try to unmask 59 00:03:29,760 --> 00:03:33,880 Speaker 1: someone involved with that. And if the f c A 60 00:03:34,160 --> 00:03:37,080 Speaker 1: deems that he is not fit and proper to lead 61 00:03:37,120 --> 00:03:39,640 Speaker 1: the firm, he could be banned from the industry. What 62 00:03:39,760 --> 00:03:42,839 Speaker 1: kind of evidence would lead them to make that kind 63 00:03:42,840 --> 00:03:49,360 Speaker 1: of a determination. I think, uh, they would need clear evidence. Um, 64 00:03:49,400 --> 00:03:52,840 Speaker 1: i'm i'm I'm guessing this. This is just an educated guest, 65 00:03:53,000 --> 00:03:57,960 Speaker 1: clear evidence that he he willfully went against uh uh, 66 00:03:58,000 --> 00:04:01,920 Speaker 1: the recommendation of you know, internal internal lawyers, And that's 67 00:04:02,000 --> 00:04:05,840 Speaker 1: very difficult. It's it's like, you know, you have to 68 00:04:05,880 --> 00:04:08,240 Speaker 1: be inside his mind. And they've said clearly that he 69 00:04:08,320 --> 00:04:11,880 Speaker 1: thought and the board has accepted his explanation that he 70 00:04:11,960 --> 00:04:14,880 Speaker 1: thought that period had passed and it was okay, uh 71 00:04:14,960 --> 00:04:18,640 Speaker 1: during his second effort. So I think for a regulator 72 00:04:18,680 --> 00:04:21,359 Speaker 1: to actually find fault with him, they would have to 73 00:04:21,360 --> 00:04:23,960 Speaker 1: somehow disprove that, which would not only be very bad 74 00:04:23,960 --> 00:04:25,440 Speaker 1: for him, it would be very bad for the board, 75 00:04:25,520 --> 00:04:28,480 Speaker 1: which has accepted that. So, you know, it's it's not 76 00:04:28,560 --> 00:04:33,360 Speaker 1: an easy thing for a regulatory authority to prove that. Well, 77 00:04:33,920 --> 00:04:38,200 Speaker 1: if the regulatory authorities find that, you know, he committed 78 00:04:38,240 --> 00:04:41,480 Speaker 1: some kind of wrongdoing here and the bank's procedures weren't 79 00:04:41,480 --> 00:04:45,560 Speaker 1: good enough. What kind of sanctions can we expect, Well, 80 00:04:45,600 --> 00:04:48,919 Speaker 1: certainly financial penalties already it's a huge embarrassment to the 81 00:04:48,920 --> 00:04:52,440 Speaker 1: bank and uh to Mr Staley himself. So you know 82 00:04:52,600 --> 00:04:54,920 Speaker 1: that's that's that in itself, this is a punishment. He's 83 00:04:54,920 --> 00:04:59,440 Speaker 1: already seen his bonus cut down. Um, it's it's undermined 84 00:04:59,520 --> 00:05:02,880 Speaker 1: one of pillars of you know, his promise to restore 85 00:05:03,200 --> 00:05:05,480 Speaker 1: you know, cultural integrity to the bank, which he made 86 00:05:05,480 --> 00:05:06,960 Speaker 1: a year and a half ago when he took over. 87 00:05:07,279 --> 00:05:09,400 Speaker 1: So there's a certain amount of this in the marketplace. 88 00:05:09,480 --> 00:05:12,000 Speaker 1: That is, you know, he is suffering for and the 89 00:05:12,000 --> 00:05:14,359 Speaker 1: bank is suffering for. On top of that, you know, 90 00:05:14,360 --> 00:05:17,560 Speaker 1: there could be regulatory fines and and some other you know, 91 00:05:20,080 --> 00:05:23,800 Speaker 1: some other sanctions related to him. That's Craig Farrell, Bloomberg 92 00:05:23,800 --> 00:05:27,279 Speaker 1: News investigative reporter, on the troubles facing Jeff Daly of 93 00:05:27,400 --> 00:05:31,080 Speaker 1: Barclays in the wake of disclosures that he improperly sought 94 00:05:31,080 --> 00:05:33,000 Speaker 1: to unmask a whistleblower. Thanks for being here.