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Barclays CEO didn’t know it was illegal?

Tom Fox | April 11, 2017

But I didn’t know it was illegal to pay bribes to obtain business!” Imagine how far that defense would get a corporate executive in the United States or the United Kingdom these days. Yet, according to reports, this is precisely the claim Barclays CEO James Staley used to excuse his conduct in trying to determine the name of an anonymous corporate whistleblower. The case has drawn regulatory scrutiny on both sides of the Atlantic from national and state regulators.

The matter involved anonymous letters the company received in June 2016 flagging allegations of a “personal nature” against another Barclays officer, Tim Main. Staley had been instrumental in bringing Main to Barclays. The two had a long-time, professional friendship which began when they both worked together at JPMorgan. The anonymous tipster alleged Main had a history of substance abuse in his past.

Staley initially order the company’s security department to unmask the whistleblower. This initial attempt was rebuffed as inappropriate. Staley then made a second request to the corporate security department who involved an unnamed U.S. law enforcement agency. At that point, a Barclays employee notified the board of directors of the inappropriate conduct, which then commissioned an internal investigation.

This type of direct CEO involvement in a clearly unethical—if not illegal—act is troubling to any international business, compliance professional, or company employee. To have a CEO engage in behavior that is so clearly outside the norms of any espoused behavior is beyond troubling. I guess Staley had not had time to read the part of the Barclays’ code of conduct, The Barclays Way, which states, “No employee will experience retaliation in any way as a result of reporting an issue in good faith.”

The effect this will have on the bank’s attempts to recover its reputation after the LIBOR scandal is unclear at this point. However, if a CEO is so willing to engage in overt behavior, which is well-recognized as violative of a company’s code of conduct, it is not too far a leap to envision other unethical behavior which could well lead to illegal acts. I wonder if Staley has ever heard of Enron.