Dealbook: James Staley’s Series of Unfortunate Events

Chair of the Firm’s Whistleblower Representation Practice Jordan A. Thomas, was recently quoted in an article profiling James E. Staley, Chief Executive of Barclays bank. The article focuses on Staley’s investigation by British bank regulators for trying to unmask a whistleblower who criticized the competency of one of his senior hires, Tim Main, formerly of JP Morgan.

Shortly after Main’s hire was announced, a letter was sent to Barclays’ independent directors, according to people briefed on its details, complaining about Main’s behavior during his rough spell at JPMorgan. Troubled by the letter, Staley said he had believed the intent of its writer was to “maliciously smear” their colleague.

Hoping to defend Main, Staley asked fellow executives whether he could investigate the letter writer’s identity, however since the letter was being treated internally as a “whistleblow,” with protections around anonymity and against retaliation, colleagues told Staley to stand down.

Weeks later, Staley tried again, this time instructing Barclays’ internal security team to track down the writer, Barclays said. The following January, Barclays said, another whistleblower contacted the board. This time, the complainant found fault with the entire whistleblowing process at Barclays, mentioning Staley’s handling of the Main letters.

Barclays’ directors hired a London law firm to investigate Staley’s conduct. According to a statement, the firm found that he had “honestly but mistakenly” sought to unmask the writer without realizing the impropriety of his actions; the board accepted the explanation.

But some lawyers said the entire chapter constitutes a grave breach of protocol, with broad implications for the bank.

“Seeking to identify the identity of the whistleblower is a violation of the law,” said Jordan A. Thomas, “but it also undermines the culture of integrity within Barclays.”

If company executives have a reputation for retaliating against whistleblowers, he added, “the leadership of Barclays will be disadvantaged because fewer people are going to be telling them about problems. And they’ll learn about problems when they’re at a more advanced stage.”

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