Speaker 1: When he became CEO of Barclays a year and a
Speaker 1: half ago. His UH Jeff Stelly's agenda focused on restoring
Speaker 1: Barclay's reputation after scandals over libor, rigging gaming currency markets,
Speaker 1: and selling customers insurance products that they didn't need. But
Speaker 1: now he faces a scandal of his own making, after
Speaker 1: trice twice trying to unmask an anonymous whistle blower last year.
Speaker 1: Steely's apologized, but Barclay's board cut is paid by an
Speaker 1: amount they call significant, and the UK's Financial Conduct Authority
Speaker 1: is investigating Staley's conduct. Here to talk to us about
Speaker 1: what's going on with Mr Staley is Bloomberg News investigative
Speaker 1: reporter Greg Farrell, who has been following this story for
Speaker 1: a while. Now, Greg, let's start out with what it
Speaker 1: is that Jess Stalely did here that that was problematic. Um, Well, Michael,
Speaker 1: there are whistlebower protections in the us UH, certainly as
Speaker 1: part of the Dodd Frank law over here, but there
Speaker 1: are comparable rules in the UK that protect anyone who
Speaker 1: wants to remain anonymous or not get retaliated against for
Speaker 1: calling a board of director's attention to what that individual
Speaker 1: perceives is wrongdoing of some kind. UM. Now, the vast
Speaker 1: majority of whistleblower complaints are actually you know, crank or
Speaker 1: inaccurate or self serving. But the law as codified and
Speaker 1: Dodd Frank is designed to protect UH protect people, give
Speaker 1: them the space to UH to send in those complaints
Speaker 1: on the off chance there is a real one, they
Speaker 1: won't be retaliated against. And what happened here, apparently, according
Speaker 1: to the Barkley's disclosure, is that the CEO, Just Daley,
Speaker 1: made an attempt and a second attempt to find out
Speaker 1: who this individual was. So Staley has admitted his error.
Speaker 1: I understand and apologize. Why is the UK Financial Conduct
Speaker 1: Authority and other UK regulatory agencies investigating well, I think
Speaker 1: the main point here and what the regulatory authorities do there,
Speaker 1: And don't forget DFS. New York's Department of Financial Services
Speaker 1: is also looking at it over here. UH is from
Speaker 1: a compliance and regulatory point of view. UH, this has
Speaker 1: nothing to do with you know, financial matters. It has
Speaker 1: to do with the soundness of the bank's compliance and
Speaker 1: risk practices. And this whistleblower complaint complaint UH and the
Speaker 1: you know, the mismanagement of it is you know, evidence
Speaker 1: that Barkley's compliance unit wasn't effective in this particular matter.
Speaker 1: So that's why, at least as of now, uh, it's
Speaker 1: a you know, prudential or regulatory oversight problem. Well, why
Speaker 1: would a CEO like Jess Staley who comes in trying
Speaker 1: to sort of clean up the reputation of a bank,
Speaker 1: I think that it's okay to try to get around
Speaker 1: whistleblower protections in this way. Well, according to the Barkley statement, um, uh,
Speaker 1: Staley the second time around thought that the matter had
Speaker 1: passed or said you know that, uh, that he thought
Speaker 1: it was okay for him to try a second time.
Speaker 1: So you know that clearly even if that and we
Speaker 1: assume that's true, but that still shows a weakness in
Speaker 1: the in the in the oversight process that it wasn't
Speaker 1: made clear to him that no, this is uh you know,
Speaker 1: this is an area you can't go into. Um. Another
Speaker 1: aspect of the Barclay's disclosure is that, uh, you know,
Speaker 1: it was viewed as a personal attack on someone who's
Speaker 1: a senior executive at the bank. And again, it doesn't
Speaker 1: matter if there's any merit to it. Uh, it's you know,
Speaker 1: obviously crossing the line to go and try to unmask
Speaker 1: someone involved with that. And if the f c A
Speaker 1: deems that he is not fit and proper to lead
Speaker 1: the firm, he could be banned from the industry. What
Speaker 1: kind of evidence would lead them to make that kind
Speaker 1: of a determination. I think, uh, they would need clear evidence. Um,
Speaker 1: i'm i'm I'm guessing this. This is just an educated guest,
Speaker 1: clear evidence that he he willfully went against uh uh,
Speaker 1: the recommendation of you know, internal internal lawyers, And that's
Speaker 1: very difficult. It's it's like, you know, you have to
Speaker 1: be inside his mind. And they've said clearly that he
Speaker 1: thought and the board has accepted his explanation that he
Speaker 1: thought that period had passed and it was okay, uh
Speaker 1: during his second effort. So I think for a regulator
Speaker 1: to actually find fault with him, they would have to
Speaker 1: somehow disprove that, which would not only be very bad
Speaker 1: for him, it would be very bad for the board,
Speaker 1: which has accepted that. So, you know, it's it's not
Speaker 1: an easy thing for a regulatory authority to prove that. Well,
Speaker 1: if the regulatory authorities find that, you know, he committed
Speaker 1: some kind of wrongdoing here and the bank's procedures weren't
Speaker 1: good enough. What kind of sanctions can we expect, Well,
Speaker 1: certainly financial penalties already it's a huge embarrassment to the
Speaker 1: bank and uh to Mr Staley himself. So you know
Speaker 1: that's that's that in itself, this is a punishment. He's
Speaker 1: already seen his bonus cut down. Um, it's it's undermined
Speaker 1: one of pillars of you know, his promise to restore
Speaker 1: you know, cultural integrity to the bank, which he made
Speaker 1: a year and a half ago when he took over.
Speaker 1: So there's a certain amount of this in the marketplace.
Speaker 1: That is, you know, he is suffering for and the
Speaker 1: bank is suffering for. On top of that, you know,
Speaker 1: there could be regulatory fines and and some other you know,
Speaker 1: some other sanctions related to him. That's Craig Farrell, Bloomberg
Speaker 1: News investigative reporter, on the troubles facing Jeff Daly of
Speaker 1: Barclays in the wake of disclosures that he improperly sought
Speaker 1: to unmask a whistleblower. Thanks for being here.