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Barclays CEO Whistle-Blower Probe Is Said to Take Until December

  • Results of FCA investigation into CEO pushed back from October
  • Bank trying to resolve misconduct allegations in U.S., U.K.

U.K. regulators probing Barclays Plc Chief Executive Officer Jes Staley’s attempts to unmask a whistle-blower will probably take until the end of the year to conclude their investigation, people with knowledge of the process said.

The Financial Conduct Authority expects to reach a final decision on Staley’s fate in December, said the people, who asked not to be identified speaking about an open case. That would be two months later than the original October target indicated to the bank, two people said. It’s not clear why the probe has been extended, they said.

In the past few months, the FCA interviewed the CEO twice, as well as other officials including Mike Ashley, the board member who supervises whistle-blowing complaints and Chief Operating Officer Paul Compton, Bloomberg News has reported earlier.

A spokesman for the bank declined to comment, as did a spokeswoman for the FCA.

The delay adds to a series of unresolved issues hanging over the lender and its top executive, who may have to step down if the regulator deems him unfit to lead a financial institution. The firm is also preparing to fight the U.S. Justice Department in court over a multi-billion-dollar fine for its role in selling mortgage bonds that contributed to the financial crisis. In the U.K., four former Barclays executives will stand trial in 2019 on allegations they conspired to commit fraud over the bank’s 2008 fundraising with Qatar.

The bank’s stock has dropped 15 percent this year, the biggest drop on the 44-member Bloomberg Europe 500 Banks and Financial Services Index.

Barclays reprimanded Staley in April after discovering he’d repeatedly tried to identify a whistle-blower, even after colleagues said it was inappropriate. The CEO may forfeit his entire 1.3 million-pound ($1.7 million) bonus.

The investigation is the first test of the U.K.’s senior managers’ regime, a set of rules introduced last year to restore personal liability to financial executives for bad or irresponsible behavior. The FCA has placed an increasing emphasis on the importance of internal complaints, requiring firms to nominate an individual to the role of "whistle-blowers’ champion."

U.K. lawmakers, including the former chairman of the Treasury Committee Andrew Tyrie, have said they will examine regulators’ conclusions “very carefully” to see if the rules are “capable of providing meaningful scrutiny and accountability of financial institutions.”

The whistle-blower controversy dates back to June 2016, when Barclays’ board received an anonymous letter raising concerns about one of Staley’s former JPMorgan Chase & Co. colleagues, Tim Main, Bloomberg News previously reported. The letters flagged issues of a personal nature about him and Staley’s role in dealing with those concerns at JPMorgan.

After learning about the letters, Staley made two attempts to discover who wrote them, despite being informed that it was inappropriate for him to do so after his first try. The second attempt was made after he thought the matter had been resolved. Barclays said in April the board thought Staley "honestly, but mistakenly, believed" his actions were permitted.

The bank’s Chairman John McFarlane has said it wouldn’t have been “just” to fire Staley over the issue, and cited his inexperience in a CEO role as a factor in the board’s thinking. Staley, the former head of JPMorgan’s investment bank, became the U.K. lender’s CEO in December 2015.

“The punishment for going through a red light is not to lose your license,” McFarlane said. However, “we will address his compensation” appropriately, he said.

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