FCA, PRA Sanction Barclays, Executive Re Whistleblower

by Dorsey & Whitney LLP

The Commission has brought a number of actions seeking to protect whistleblowers. One action, for example, was brought against a firm which tried to bar former employees from talking to regulators by inserting provisions in its severance clauses while retaliating against a whistleblower. In the Matter of SandRidge Energy, Inc., Adm. Proc. File No. 3-17739 (December 20, 2016). Another centered on similar allegations about restrictions in severance clauses but also included allegations that the firm delayed legal fee payments under an indemnification agreement for the attorney representing a former executive who had received whistleblower information and declined to state if his client was a whistleblower, citing at one point Exchange Act Section 21F. In the Matter of HomeStreet, Inc., Adm. Proc. File No. 3-17801 (January 19, 2017).

None of the Commission’s actions to date have centered solely on allegations that it was improper for an executive who was named in a whistleblower report to conduct an inquiry about that report. That is the focus of the actions recently taken in the U.K. by the Financial Conduct Authority or FCA and the Prudential Regulation Authority or PRA. Together the two regulators imposed a fine of £642,430 on James Stanley, Chief Executive of Barclays Group. Special requirements were also imposed on the bank.

The action stems from an anonymous letter received by Barclays in June 2016. The letter claimed to be from a shareholder of the bank. Some of the allegations in it concerned Mr. Stanley. This, the FCA and PRA concluded, constituted a conflict for Mr. Stanley in view of which he “should have maintained an appropriate distance.” In fact he did not. To the contrary Mr. Stanley took steps to try and identify the author.

Continuing to conduct an investigation in the face of a conflict was a breach of the requirement to act with integrity, the regulators concluded. In view of the conflict Mr. Stanley should have realized that he “needed to take particular care to maintain an appropriate distance from Group Compliance’s investigation,” according to the two U.K. regulators. There was a risk, under the circumstances, that Mr. Stanley would not be able to exercise impartial judgment. Once the Group Compliance investigation commenced, it was important that it maintain control over the inquiry.

This is the first case brought under the Senior Managers Regime. The inquiry concluded that Mr. Stanley made “serious errors of judgment.” Accordingly, the penalty imposed was 10% of his relevant annual income. The fine does consider that Mr. Stanley settled at an early stage. He was also censured.

The two regulators also expressed “some concerns about the firm’s whistleblowing systems and controls and have concluded that these require enhanced monitoring and scrutiny” stemming from Mr. Stanley’s actions. In view of those concerns, Barclays is being required to report any whistleblowing allegations made against senior managers as well as those where the bank has tried to identify the whistleblower. Each year under the Senior Managers Regime officials will have to attest to the soundness of the whistleblowers systems. This will continue until 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dorsey & Whitney LLP | Attorney Advertising

Written by:

Dorsey & Whitney LLP

Dorsey & Whitney LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.