Barclays chief faces bonus cut in whistle-blower probe

Barclays PLC Chief Executive Officer Jes Staley will be reprimanded and the bank will cut his pay as regulators begin to investigate how he tried to unmask a whistle-blower last year.

The UK Financial Conduct Authority is investigating both Staley’s individual conduct relating to the complaint and the bank’s responsibilities and controls in connection with whistleblowing, the bank said in a statement on Monday. Staley has admitted his error and formally apologised to the board, Barclays said.

Staley tried to unmask a tipster who alerted the bank to a personal matter involving a senior executive, the bank said, confirming what a person with knowledge of the matter told Bloomberg. An investigation by law firm Simmons & Simmons concluded that Staley “honestly, but mistakenly” believed that it was permissible to identify the author of the letter. The case is also under scrutiny by the Department of Financial Services in New York, the person said.

“I have apologised to the Barclays Board and accepted its conclusion that my personal actions in this matter were errors on my part,” Staley said in the 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.”

Barclays shares dropped as much as 1.2 per cent in London trading and were down 0.4 per cent at 214.6 pence as of 8:05 am. The stock has fallen about 4.1 per cent this year, giving the company a market value of £36 billion ($44.6 billion).

Barclays has made excellent progress under Staley and his removal at this stage would hurt the bank’s prospects for further improvement, Shore Capital analyst Gary Greenwood wrote in a note to investors. Given the bank’s history of regulatory misdemeanors, the latest investigation is a “very significant embarrassment” for the board as it tries to rebuild Barclays’s reputation, he said.

Staley has revamped his management team and refocused on the bank’s priority markets since he assumed leadership of Barclays in late 2015. He also rebuffed calls to spin off or radically shrink the investment bank, instead opting to speed up business sales and sell down the firm’s African banking stake