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UT (Tax & Chancery) UT-2022-0000150 - [2024] UKUT 00254 (TCC)
Fecha: 10-Jul-2024
The culture at Barclays Wealth Americas
The culture at Barclays Wealth Americas
In September 2008, Barclays acquired Lehman Brothers’ wealth management business, and renamed it Barclays Wealth Americas (“BWA”). As Mr Kalaris was Barclays’ Chief Executive of Wealth and Investment Management, the integration of the Lehman business came under his remit. To assist with that process, new management was hired from Merrill Lynch; including Mr Mitch Cox and some of his team members.
In 2011, a number of problems surfaced:
BWA’s approach to regulatory compliance fell below the expected standard;
there were cultural issues and “battles” between BWA’s legacy staff about revenue splits and responsibilities; and
the management style of certain new hires, including Mr Cox and his team, was perceived to be overly aggressive.
In the same year, the US Securities and Exchange Commission (“SEC”) undertook a comprehensive regulatory review of BWA. Barclays became aware that the SEC had identified fundamental problems with BWA’s infrastructure, and that their findings would be negative. On 25 January 2012, the SEC issued BWA with a deficiency letter (“the SEC Letter”), which identified issues relating to regulatory controls.
- Heading
- Introduction and Summary
- The Barclays references
- The Tribunal’s view
- Subsequently
- Legislation, case law and the Handbook
- The legislation and related case law
- The Handbook
- The Decision Notice
- Evidence
- The evidence on the capital raising issue
- Mr Beauchamp
- Mr Tinney
- Mr Perry
- Mr Mason
- Mr Biesinger
- Findings of fact
- Mr Kalaris
- Capital raising, GenVen and the Interviews
- The criminal proceedings
- Saranac
- The SWF initiative
- The economic situation
- The ASA
- The link between the ASA and the capital raising
- The text of the ASA
- The Prospectus
- The second capital raising and PCP
- The 2013 Interview
- What Mr Kalaris knew
- What the Authority knew
- What Mr Kalaris believed about the Authority’s knowledge
- Mr Kalaris’s responses relied on by the Authority
- Question 1: The “genesis of the agreement”
- Q1: The Authority’s position
- Who came up with the idea?
- The two paths
- Strategic relationship
- Unnecessary?
- The Tribunal’s findings
- Question 2: the purpose
- Q2: The Authority’s position
- Q2: Saranac’s position
- Q2: The Tribunal’s findings
- Question 3: the calculation
- Q3: The Authority’s position
- Q3: Saranac’s position
- Q3: The Tribunal’s findings
- Question 4: connection
- Q4: Saranac’s position
- Q4: The Tribunal’s findings
- Motive?
- Overall conclusion on the 2013 Interview
- THE 2014 INTERVIEW
- The culture at Barclays Wealth Americas
- The cultural audit
- The pre-meeting communications
- Briefing and the subsequent meetings
- Ms Hilgart
- The Cultural Workshop
- The Whistleblower email
- The Fed update
- The 2014 Interview
- The position of the parties
- Discussion and consideration
- The briefing on 30 March 2012
- The meeting on 5 April
- The meeting on 10 December 2012
- The weekend of 14-15 December 2012
- Overall findings
- OTHER FINDINGS
- The other evidence
- The Saranac assessment
- The personal references
- The capital raising and the GenVen Report
- Financial services experience
- Mr Kalaris’s approach to regulatory requirements in the past
- Compliance with restrictions
- Training
- The standing of the NEDs
- Mr Elliott
- Mr Neilly
- The Tribunal’s conclusion
- Conclusions