On the 14 September 2016, the FCA published a Decision Notice (the Notice) in respect of Andrew James Tinney, the former Global Chief Operating Officer of Barclays Wealth and Investment Management, including Barclays Wealth Americas (BWA). The Notice concerns the conduct of Mr Tinney in respect of a report (the Report) he commissioned from an external consultancy regarding BWA’s management and its organisational culture.

In March 2012, the consultancy delivered a hard copy of its report to Mr Tinney, at his instruction, to his home only. It was highly critical of a number of BWA managers and opined that BWA had pursued a course of “revenue at all costs”. It recommended that Barclays should consider removing some members of BWA’s senior management.

What happened next was astonishing. Mr Tinney, having discussed the findings with his manager, took steps to ensure that no one else would ever read the Report. These steps included not sharing the Report with anyone, not entering it into the IT system, and instructing the consultancy not to circulate any copies. He sought to ensure that it was buried forever and so, for example, if BWA was sued the Report which presumably would be dynamite evidence for a claimant, would never be discoverable.

Unfortunately for Mr Tinney the Report came back to haunt him. Six months later, in September 2012, a whistle blower anonymously contacted Barclays Chairman by e-mail and alleged that a “wealth cultural audit report” obtained by BWA had been supressed. The CEO of Mr Tinney’s Division decided that a note addressing the allegation needed to be drafted for circulation to the Chairman and the CEO of Barclays. Mr Tinney was unsurprisingly heavily involved in the drafting. The note was a model of sophistry, making no mention of the Report. When the rumour refused to go away Mr Tinney decided to keep digging. He persisted in not mentioning what he knew about the Report even when the Federal Reserve Bank of New York, alerted to the anonymous email, started pushing for sight of it.

His position unravelled when Barclays contacted the consultancy firm who had provided the Report and duly obtained another copy. Mr Tinney then resigned from Barclays in December 2012.

The FCA decided to investigate his conduct. Their probe culminated in this Notice. It finds that his conduct was sufficiently egregious to merit a censure and a ban from carrying out any senior management or Significant Influence Functions. The Notice holds that he acted recklessly by making misleading statements about the Report. In doing so he breached APER Principle 1, on the basis of his having a lack of integrity, and is consequently not a fit or proper person under the FIT regime.

COMMENT

There are several interesting issues arising from the Notice. Firstly, why did Mr Tinney try to destroy the Report? It levelled no criticism of him whatsoever; he was not mentioned at all. The explanation he gave to the FCA was that he believed the Report was a “litigation risk”. He appears to have believed that if he destroyed his copy of the Report, and was able to prevent anyone else from knowing about it, this risk would somehow disappear. No original document, and no copies in the bank, meant no obligation on Barclays to produce it in litigation.

In the light of the increase of litigation against banks and regulatory enforcement in the wake, firstly of the 2008 financial crisis, and then the LIBOR scandal, it seems incredible that there was a senior manager in a major bank in London who believed that destroying and/or hiding critical reports which the bank commissioned was justifiable.

Secondly, the FCA’s finding of Mr Tinney’s misconduct concerns only his conduct from September 2012 onwards, commencing with his reaction to the whistle-blower’s allegation. This limitation is surprising. In the Notice, the FCA stated that it considered “that Mr Tinney did have legitimate concerns at the outset around the litigation risk and employment law consequences about the report being circulated.” Whether Mr Tinney’s concerns were legitimate or not, his actions from the outset in seeking to prevent the Report from ever seeing the light of day should surely have been considered in the context of a potential APER Principle 2 breach, or in respect of the FIT regime.

Thirdly, the FCA regards Mr Tinney’s behaviour as only “reckless”. There was no finding of anything deliberate or intentional. Mr Tinney is very fortunate that the FCA was reluctant to go further. For example, in his interview with the FCA, Mr Tinney admitted that what he had previously contended to his professional regulator, the ICAEW, to the effect that he obtained supportive legal advice when trying to bury the Report, was incorrect. Barclays had, by this stage, established that there was no record of him seeking such advice. In characterising his behaviour as being only reckless a cynic would suspect that the FCA opted for what it hoped would be, for its purposes, the easier option. In only finding recklessness, the FCA hoped that Mr Tinney would take his punishment and quietly walk away.

If pragmatism was the rationale for the penalty, the FCA may have unwisely provided Mr Tinney with reasonable grounds to appeal. How is it reasonable to censure and ban an otherwise unblemished banker for this merely reckless conduct?

Mr Tinney is apparently appealing to the Upper Tribunal. If he does, the FCA’s new Director of Enforcement, Mark Steward, may want to consider whether in this case the FCA’s regulatory process satisfy his references to greater transparency in decision-making.