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15 Sep 2016 01:17pm

Andrew Tinney appeals against FCA ban over “culture cover-up”

ICAEW member and former global COO of Barclays Wealth and Investment Management Andrew Tinney has appealed against a ban that the Financial Conduct Authority is seeking to impose to prevent him from carrying out a senior management role in any regulated financial services institution

In a statement, he said he did not accept that any of his actions could be construed as misconduct. “I look forward to finishing the job of clearing my good name in the upper tribunal,” he added.

The FCA’s decision to ban and publicly censure him follows the regulator’s finding that he had deliberately covered up a highly critical independent report into the culture at BWIM’s US branch, Barclays Wealth America (BWA).

In early 2012, the branch had been put on notice by the US Securities and Exchange Commission (SEC) that it had uncovered a number of deficiencies during a regulatory examination. Tinney was appointed to lead a working group overseeing remediation.

As part of the remediation work, Tinney appointed a consultancy to examine BWA’s culture, including how the “tone at the top” flowed through the organisation.

The consultancy report contained serious criticisms of certain BWA senior managers and accused BWA of pursuing a course of revenue at all costs and of having a culture that was high risk and actively hostile to compliance. It recommended that some of BWA’s senior management should be replaced.

In its decision notice, the FCA alleges that Tinney was the only person to see the report, although a small number of senior individuals within BWIM and BWA knew of it and its conclusions.

After discussing it with his chief executive at BWIM, he took steps to ensure that the report would not be seen “by not sharing it with anyone, not entering it in the firm’s records or IT systems, and instructing the consultancy that they did not need to circulate a copy”.

The cover-up plan began to fall apart after an anonymous email arrived in the chairman’s inbox alleging that a BWIM report had been suppressed. BWIM then received a request for a copy from the Federal Reserve Bank of New York. In response to both cases, the FCA alleges, Tinney made misleading statements and omissions about the nature and existence of the report.

In December 2012, BWIM received a copy of the report directly from the consultancy and shortly afterwards suspended Tinney. He then resigned from BWIM.

The FCA says his misconduct was “serious”, “particularly in the light of his seniority at the firm, his substantial industry experience and the obvious significance of the concerns giving rise to, and set out in, the report”.

Not only could it have undermined BWA’s efforts to address failings in its compliance with its legal and regulatory obligations, but it also took place during the Salz review, an independent review of business practices that BWIM’s board had launched after Barclays had been forced to pay out £280m in fines on both sides of the Atlantic in the wake of the Libor scandal.

Given that this was intended to examine the firm’s values, principles and standards of operation and make recommendations for change, Tinney “should have understood the connection between the firms’ culture and regulatory compliance and senior management’s ability and willingness to positively influence appropriate behaviour throughout the organisation”.

Finally, the FCA says his misconduct was “aggravated” when he gave a different account of “certain events” in correspondence to ICAEW to the one he gave in interviews with FCA investigators.

Julia Irvine

 

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