Going Rogue: Circumventing Your Company’s Internal Investigation Process to Identify a Whistleblower Will Cost You
The CEO of Barclays risks losing his 1.6 million-dollar bonus for launching his own personal investigation to identify the company whistleblower who wrote two anonymous letters about his colleague to the Barclays’s Board of Directors. In the letters—sent in 2016 through the firm’s whistleblower program—the employee raised concerns about a recent senior-level recruit and Barclays’s process for hiring the person. CEO Jes Staley learned of the letters and twice enlisted the help of the bank’s security team to find the author. Even though Staley failed to ID the whistleblower, his conduct violated key laws protecting whistleblowers’ anonymity and prompted a swift response from British regulators.
In April 2017, Britain’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) launched their own investigations into Barclays and Staley, treating Staley’s conduct as a whistleblowing incident. FCA and PRA rules zealously protect the identity of whistleblowers to encourage employees to come forward.
Barclays also launched its own independent investigation, hiring an external law firm to review Staley’s motivations. The firm found that Mr. Staley “honestly, but mistakenly, believed that it was permissible to identify the author of the letter.” In an April apology email to Barclays’s employees, Mr. Staley admitted the mistake and explained that he launched the investigation because he felt the anonymous letter contained an unfair personal attack on a colleague. This May, Mr. Staley again acknowledged his mistake and apologized to the bank’s shareholders, although the apology reportedly received a lukewarm reception.
Apart from the financial consequences, the Board plans to issue a formal reprimand to Mr. Staley. The regulatory investigation is still underway and will probably take several months to complete. Thus, it remains to be seen whether Barclays’s decision to admonish and hit its CEO in the pocket will appease regulators or Barclays’s shareholders. Staley’s mistake could cost him his job and slap Barclays with a heavy fine.
The Barclays/Staley investigation reaffirms that whistleblowers serve an important—and legally-protected—function as law enforcement’s “boots on the ground” within an industry. As such, a whistleblower’s anonymity must be zealously guarded. While UK regulations serve as the legal backdrop in this investigation, the Dodd-Frank Wall Street Reform and Consumer Protection Act contains similar, and in some ways more stringent, whistleblower anonymity protections.
Thus, Mr. Staley’s experience offers three key lessons for CEOs and companies everywhere:
- Don’t act in ways that could be construed as meddling with your company’s internal investigation of conduct reported through its whistleblower program.
- Ignorance of an industry regulation’s anonymity requirements is no defense in regulatory investigations.
- At all events, do not take matters into your own hands and launch an investigation outside your company’s whistleblower reporting program.
Read more here: