The Barclays whistleblower hunt revealed a bank with extraordinary eyesight whenever the danger was an anonymous critic.
Public registers, police raids and millions moving through questionable channels proved more challenging. Apparently, the binoculars were in another fucking building.
Welcome back to Renting Rubin. We promised we’d be back!
Our first Barclays excavation examined LIBOR, gold and foreign exchange. We found markets moving themselves, customers being hunted by their own bank and compliance arriving afterwards with a lanyard and the expression of a plumber viewing the Atlantic.
We also said there were more cupboards. And told you we’re opening closets.
Barclays appears to have taken that as a dare.
Horsfield Menzies advertises Daniel Rubin’s Barclays secondment as part of his corporate pedigree. The same profile promotes his experience in investigations, disciplinary issues, reputation management and investor confidence.
We do not know whether Rubin was involved in any of the events below, advising on something else, or eating somewhere.
His biography does not say.
What it does say is that Barclays belongs in his professional shop window. TCAP has returned with a torch and no intention of admiring the glazing.
This sequel is about institutional eyesight.
When an anonymous writer questioned the chief executive, Barclays found Group Security, American contacts and the outer edges of federal law enforcement.
When financial-crime warnings arrived, the bank found a comfortable chair.
The Barclays Whistleblower Hunt
On 21 June 2016, a member of the Barclays board received an anonymous letter.
Its author used the name “John Q. Public” and claimed to represent a long-term institutional shareholder. The letter raised concerns about a recently hired senior executive, Barclays’ recruitment process and chief executive Jes Staley’s involvement.
Three days later, Barclays received another anonymous letter containing similar concerns. This one purported to come from employees inside the bank.
The underlying allegations are not our subject.
The response is.
A properly governed institution would have handed the matter to its whistleblowing specialists and kept the conflicted chief executive at a safe distance.
Barclays instead began preparing a corporate manhunt.
The first letter circulated among senior executives. On 28 June, Staley instructed Group Security to try to identify its author.
The next day, senior colleagues told him that Barclays might be treating the letter as a whistleblow. They advised him not to identify the writer and not to interfere.
Staley accepted that advice.
For nine days.
After receiving an update from Group Compliance on 8 July, he misunderstood the position and instructed Group Security to resume the search. He did not obtain express confirmation that the letter was no longer protected. Nor did he tell Compliance that the hunt was restarting.
That takes a special class of executive craftsmanship.
Hear “stop”.
Say “understood”.
Then smuggle the same instruction back through a conversational crack before the minutes have cooled.
Group Security Versus An Envelope
On 11 July, Staley told Group Security that he had received clearance.
He had not.
The following day, his office supplied the envelope to the security team. Barclays then sent the original to an employee in the United States, who engaged American contacts in an attempt to trace its sender.
By 2 August, Group Security was trying to obtain video footage showing where the postage had been purchased.
Consider the machinery involved.
An anonymous complaint had entered the bank. Suddenly, senior-management attention sharpened. Group Security stirred. An envelope crossed the Atlantic. American contacts searched for footage. Federal resources entered the story.
This was not a violent threat. Nobody had planted a device beneath the trading floor.
Somebody had written a fucking letter.
The New York Department of Financial Services later found that Barclays had failed to report the use of federal law-enforcement resources obtained through incomplete or inaccurate information supplied to a federal agency. Those resources had been used to investigate a non-threatening and non-urgent whistleblower complaint.
On 3 August, Group Security admitted defeat.
John Q. Public remained unidentified.
Barclays had deployed its security apparatus, crossed governance lines and reached towards federal resources. And still it lost. To a fucking envelope.
The FCA and PRA fined Staley a combined £642,430. New York fined Barclays $15 million over failings in its whistleblowing programme. UK regulators also imposed special monitoring requirements on the bank.
The Barclays whistleblower hunt was a failure in every conventional sense.
However, it demonstrated something useful.
Barclays could search with remarkable enthusiasm when the object of the search was a critic.
Same Summer, Different Fucking Eyesight
Now we reach the filthy symmetry.
The whistleblower hunt ended in early August 2016.
That same month, Barclays received law-enforcement information indicating that Fowler Oldfield may have been used to launder suspected criminal proceeds. The information identified Stunt & Co as one of the principal recipients of electronic transfers.
Suddenly, the institutional eyesight changed.
Between July 2015 and August 2016, Stunt & Co received £46.8 million from Fowler Oldfield through 561 electronic payments.
Of those payments, 361 were round transfers of £100,000.
They did not creep across the account wearing slippers.
They marched through in six-figure uniforms, again and again, like a ceremonial regiment sponsored by the proceeds-of-crime department.
Barclays had originally classified Stunt & Co as low risk.
Information about a joint venture and substantially increased turnover did not produce an adequate reassessment. Neither did the volume of money travelling through the account.
Then came the law-enforcement information.
Still, the response lacked urgency.
Police Raids And The Low-Risk Bib
In September 2016, Barclays identified media reports that police had raided the premises of both Stunt & Co and Fowler Oldfield in connection with suspected money laundering.
Its own team reviewed the relationship.
Nevertheless, Barclays concluded that the activity remained consistent with its understanding of the business. The risk rating stayed unchanged. No enhanced due diligence arrived to spoil the atmosphere.
A further production order followed in November.
In January 2017, Barclays completed another customer review and certified that the required due diligence had been performed. Yet questions remained unanswered about Stunt & Co, Fowler Oldfield and the source of James Stunt’s wealth.
Still, the low-risk label survived.
It sat there like a paper bib tied around a crocodile.
Barclays conducted no annual review of the company’s accounts during 2018 or 2019, despite receiving several court orders connected with Stunt and the business.
Even criminal charges against Stunt in May 2020 did not prompt Barclays to examine the account activity.
The bank launched its significant investigation only after learning in March 2021 that the FCA had decided to prosecute NatWest over its relationship with Fowler Oldfield.
Not when law enforcement supplied information.
Or when police raided both firms.
Not when production orders arrived.
And not when hundreds of round-number payments marched across the ledger.
Another bank had to be prosecuted before Barclays found the fucking light switch.
£39.3 Million For Selective Curiosity
The FCA fined Barclays £39.3 million for failing to manage the money-laundering risks associated with Stunt & Co.
Without the early-settlement discount, the penalty would have exceeded £56 million.
The regulator concluded that the £46.8 million received from Fowler Oldfield represented criminal proceeds and that Stunt & Co’s account had been used partly to launder those funds. It also said Barclays had facilitated the movement of money linked to financial crime.
James Stunt was acquitted of the money-laundering charges brought against him. The FCA’s findings here concern Barclays’ controls and the funds that travelled through the account.
Barclays eventually reviewed its exposure, reported its findings and cooperated with the regulator.
Splendid.
The fire brigade eventually arrived after somebody prosecuted the building next door.
Yet the chronology remains magnificent.
During the summer of 2016, an anonymous critic attracted Group Security, American contacts and attempts to obtain surveillance footage.
Meanwhile, law-enforcement intelligence concerning suspected money laundering received all the institutional urgency of a room-service request for another pillow.
The person with the pen looked dangerous.
The money looked like business.
The Register Search Barclays Could Not Make
Years later, WealthTek demonstrated that the problem was not confined to one account or one executive era.
Barclays opened a client-money account for WealthTek without gathering sufficient information about its purpose, the clients whose money would enter it or the expected level of transactional activity.
The bank also failed to check the Financial Services Register.
That check would have shown that WealthTek was not permitted by the FCA to hold client money.
The register was public.
It was not encrypted, concealed behind legal privilege or buried beneath search-engine results worse than Sam Butler’s.
Barclays simply did not look.
Instead, its principal account-opening check concerned an internal Barclays classification code. The bank effectively read the name badge it had written itself and decided the visitor belonged upstairs.
More than £34 million subsequently entered the account from WealthTek clients.
The FCA later described the episode as evidence of wider systemic failings in Barclays’ approach to opening client-money accounts.
One public search could have exposed the regulatory restriction.
This was not advanced forensic accounting conducted in a bunker beneath Canary Wharf. It was not a puzzle requiring Alan Turing, three warrants and a sacrificial compliance officer.
It was the Financial Services Register.
A website.
Barclays Knew The Staircase Was Broken
Barclays had already identified shortcomings in its account-opening procedures during 2020. It proactively informed the FCA and began developing improved processes.
Those facts belong in the record.
So does the chronology that followed.
The WealthTek client account opened in 2021. New procedures arrived later that year. However, Barclays did not require a Financial Services Register check until May 2022.
Remediation of the WealthTek account began in July 2022. The bank finally decided to close it in April 2023.
Barclays knew the staircase was defective, informed the regulator that repairs were planned and continued showing people towards the upper floor.
The FCA imposed a £3.09 million penalty. Barclays also agreed to contribute approximately £6.3 million towards shortfalls suffered by WealthTek clients.
Again, the bank cooperated.
Again, remediation arrived.
And again, expensive professionals gathered around the crater and discussed improvements to the warning signs.
The recurring problem is not that Barclays possessed no controls.
It is that the controls kept acquiring meaning after the money had travelled through them.
Curiosity Takes The Executive Lift
Barclays’ curiosity had another peculiar limitation.
It struggled when required to look upwards.
In October 2019, Barclays sent the FCA a letter concerning Jes Staley’s relationship with Jeffrey Epstein.
The letter contained two misleading statements. It claimed that Staley did not have a close relationship with Epstein and that contact had ended well before Staley joined Barclays.
Emails later showed a different picture.
Staley had described Epstein as one of his deepest and most cherished friends. He remained in contact shortly before his appointment as Barclays chief executive was announced and indirectly afterwards.
The Upper Tribunal found that Staley had recklessly approved the Barclays letter. It also found that some of his evidence lacked credibility and that he had shown no remorse.
The FCA ultimately fined him approximately £1.1 million and banned him from holding senior-management or significant-influence roles in regulated financial services.
The sanction landed on Staley.
The letter still left Barclays’ building with Barclays’ name attached.
Once again, scrutiny became strangely delicate when it approached the executive floor.
Anonymous critic below?
Release the hounds.
Chief executive above?
Dim the lights and let the wording breathe.
Barclays’ Decorative Moral Compass
Barclays currently describes Respect, Integrity, Service, Excellence and Stewardship as its moral compass.
Its Raising Concerns page says whistleblowing matters go to a specialist, impartial team. It also says concerns are taken seriously and nobody should suffer retaliation for raising one.
Good.
That is what a responsible bank should say.
However, policies do not become culture merely because somebody types them into a tasteful blue webpage.
A value is not a compass when senior people treat north as a reputational suggestion.
In 2016, criticism of the chief executive activated a security hunt.
That same summer, law-enforcement intelligence about suspected money laundering failed to trigger an adequate response.
Later, a public-register restriction went unchecked before £34 million entered a client account.
Then a Barclays letter containing misleading statements about its chief executive’s Epstein relationship went to the regulator with his approval.
That is not a compass.
It is a brass ornament screwed to the dashboard of a getaway car.
Renting Rubin And The Search Priorities
Horsfield Menzies presents Daniel Rubin as an adviser on sensitive investigations, disciplinary issues, investor confidence and reputation management.
Barclays therefore makes a fascinating corporate reference.
The first Renting Rubin visit found markets that moved themselves.
The second finds a search function calibrated according to the status of the target.
An inconvenient writer attracted executive attention and international detective work.
Financial-crime warnings, police raids, production orders and a public regulatory restriction received something markedly less athletic.
That is selective curiosity.
It looks downwards with a sniper scope and upwards through frosted glass.
It can examine the critic’s envelope but not the executive’s account.
And it can seek surveillance footage for a postage purchase while hundreds of £100,000 payments proceed through the bank wearing matching fucking uniforms.
Most importantly, this is not a story about Barclays failing to find anything.
The bank proved that it could search.
It proved that it could mobilise.
It proved that it could pursue.
The question is what made it want to.
Scrutiny examines power.
Surveillance hunts the person questioning it.
Barclays’ record shows a disturbing appetite for the second and a recurring visual impairment around the first.
Renting Rubin will continue opening the closets.
We told you we brought a skeleton key.
Unlike Barclays’ due diligence, TCAP completes the fucking search.
Lee Thompson – Founder, The Cummins Accountability Project
Sources
- Horsfield Menzies – Daniel Rubin profile
- TCAP – Renting Rubin: Barclays And The Markets That Moved Themselves
- FCA and PRA – Jes Staley whistleblower fine and Barclays monitoring requirements
- FCA – 2018 Final Notice concerning Jes Staley
- New York Department of Financial Services – $15 million Barclays whistleblowing penalty
- FCA – Barclays fined £42 million over WealthTek and Stunt & Co
- FCA – Barclays UK WealthTek Final Notice
- FCA – Barclays Bank Stunt & Co Final Notice
- FCA – Upper Tribunal upholds Jes Staley ban
- Barclays – Raising Concerns
- Barclays – Purpose And Values