Barclays Chief Executive Officer Jes Staley has once again found himself in the crosshairs of the regulatory authorities.
This time it’s the US Department of Justice (DoJ) targeting him for his handling of recruiting processes in relationship with US lending giant JPMorgan Chase. A DoJ inquiry is to ascertain whether Barclays breached antitrust laws in its hiring of JPMorgan’s bankers, which included a string of defections shortly after the appointment of Mr. Staley.
The DoJ examination is the latest blow to Mr. Staley, who is already under a cloud of suspicion by the UK’s Financial Conduct Authority (FCA) and the Department of Financial Services in NY for the attempted unmasking of a whistleblower. Perhaps more importantly, Barclays itself is in the midst of a tumultuous restructuring process as the bank tries to navigate forward amidst an industry contraction and several prevalent headwinds facing the bank.
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Since ascending to its highest ranks in 2015, Mr. Staley has overseen some of Barclays’ most trying times in recent memory. The DoJ has requested more information from Barclays, including any communications and dialogue between its own leadership and senior JPMorgan executives, given the timely string of high-level departures from JPMorgan to Barclays, according to a Financial Times report.
No Poach? No Evidence
Despite the recent launch of an inquiry by the DoJ, JPMorgan Head Jamie Dimon had already been keenly aware of the multiple defections, even voicing a complaint to Barclays Chairman John McFarlane. On its part, the DoJ is looking into whether Barclays entered into a so-called ‘no-poach’ agreement, pledging not to hire more JPMorgan bankers.
Inked into law back in October 2016, such actions or brokered agreements are not legal, notably under US antitrust laws, which would no doubt result in fines or broader disciplinary action for the beleaguered lender. However, if any such agreement did transpire, JPMorgan has opted not to acknowledge it, recently stating that there were no such deals agreed upon and multi-lateral hiring continues to take place between the banks. Barclays leadership has also pushed back on allegations of any deal, especially Mr. Staley himself.
In addition, the logistics of a full-on DoJ investigation could also run into some issues, namely in regard to its latitude and jurisdiction, as Mr. Staley is based in the UK. For now, UK authorities have not decided to pursue an investigation into whether ‘no-poach’ agreements were brokered – to date, the DoJ is also tepidly examining any details or facts overlooking the situation, having refrained thus far from launching an actual criminal investigation.