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