Barclays Bank PLC and its New York branch were fined $15 million over allegations that include CEO James E. Staley tried to root out the identities of the authors of two whistleblower letters.
The fine and settlement stem from whistleblower violations by Staley and other Barclays top executives, the New York Department of Financial Services alleged in a Dec. 18 announcement. The agency will oversee the bank’s whistleblower functions as part of the settlement, DFS said.
Staley’s actions in 2016 violated the bank’s policies, the DFS said. The whistleblower letters related to the hiring of Staley’s friend into a senior executive position at the bank, according to the consent order.
Other senior executives also violated the bank’s whistleblowing policies and procedures to protect the bank and the CEO, the DFS alleged.
The fine comes as a result of the agency’s investigation into those policies and other “shortcomings in governance, controls and corporate culture” at Barclays, the announcement said.
“Whistleblowers are vital to uncovering and addressing intentional wrongdoing. DFS’s thorough investigation uncovered actions at the top that exposed the bank to risk and created an atmosphere in which employees might doubt that it was safe to escalate issues of concern to the bank,” DFS Superintendent Maria Vullo said in the release.
“The Department recognizes and appreciates Mr. Staley’s commendable and constructive steps to accept responsibility for his actions, apologize to employees of the bank, and recommit to DFS that he will oversee an independent and effective whistleblowing function,” Vullo said.
In a statement on its investor relations page, the bank noted the DFS settlement was the last of three regulators’ investigations into the events. A spokesman for the bank declined further comment.
To read more from Banking Law News pleaseOR Request Trial