Barclays PLC (ADR) (NYSE:BCS) (LON:BARC), the compliance challenged entity that has garnered fraud and market manipulation charges on both sides of the Atlantic, is opening a school to teach compliance to its employees – but should the real student be its top management?
Barclays plans to award certificates in compliance
In announcing the Compliance Career Academy in partnership with Cambridge University’s Judge Business School, the started target audience is initially the banks employees globally, the lender said in a statement today. Ultimately Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) plans to open the course to staff at other firms and award certificates in compliance, a report noted.
Barclays most recently was charged with fraud as it related to high frequency trading and also was charged for rigging Libor interest rates, manipulating the gold market and selling insurance to customers who didn’t need it.
The class is targeting line employees as the problem, but should it really target the bank’s executive suite?
Barclays recent HFT fraud
Looking at the high frequency trading fraud case recently filed against it by the New York Attorney General provides insight into where the problems really might be found – issues perhaps not addressed in the new school’s classroom as it points the finger of responsibility squarely at the bank’s top management.
Sources indicate Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) allowed its highly profitable and important New York division to operate relatively autonomously. Such a decision to allow a division not to answer to top corporate management is one made at the highest levels in an organization.
Another issue is with the sudden firing of a division director at the bank after he refused to participate in an alleged fraud scheme. The handling of the firing in a way that kept management out of the apparent loop is another corporate reporting and structural issue that should be addressed in the executive suite, not by pointing the finger at lower level employees. In most banks when a director is fired it occurs over time and the manager is given several warnings. For a bank division director to be suddenly fired for not participating in a fraud – and for this not to be detected at the management level – is a reporting issue best addressed in the corporate suite, not in trading for mid-level employees.
Antony Jenkins’s drive to reshape Barclays
The move by Barclays is ostensibly part of Chief Executive Officer Antony Jenkins’s drive to reshape Barclays PLC (ADR) (NYSE:BCS) (LON:BARC)’s culture after the lender paid a record 290 million-pound ($497 million) fine for rigging the London interbank offered rate and $44 million to settle claims that a trader tried to manipulate the price of gold. But in reality the move could be nothing more than pointing the finger of responsibility away from top corporate executives.
“Strong and effective internal compliance is essential to ensuring banks operate in the right way,” Chairman David Walker said in today’s statement.
The compliance training comes on the heels of an depleted Hector Sants, the U.K.’s former chief financial regulator, resigning as head of the bank’s compliance and regulatory relations in November after less than a year on the job, citing “stress and exhaustion” according to the report.