The US Department of Justice is scrutinising whether Barclays breached antitrust laws by promising to stop poaching JPMorgan Chase bankers, in another blow to Jes Staley, the British lender's chief executive.
The DoJ asked Barclays for more information on discussions between its top brass and senior JPMorgan executives following a string of high-level departures from the US bank to its British rival . The hiring spree followed the appointment of Mr Staley, himself an alumnus of the Wall Street bank, as Barclays’ chief in December 2015.
The Financial Times reported last year that Jamie Dimon, the head of JPMorgan, called John McFarlane, Barclays' chairman, to complain about the defections. It was also reported Mr Staley then spoke to Daniel Pinto, the head of JPMorgan's investment bank.
The DoJ is examining whether Barclays entered into a so-called “no-poach” agreement by promising not to hire more JPMorgan bankers, sources said. Such agreements are illegal under US antitrust laws.
JPMorgan said: “There have been no improper agreements and we continue to hire from each other.” But the US bank declined to comment on whether it had been contacted by the authorities.
Barclays insiders vigorously rejected any suggestion that such an agreement was entered into, or that any promise was made by Mr Staley not to hire any more JPMorgan bankers. They pointed out that, since the calls, Barclays has hired at least six people from JPMorgan, some at managing director level.
Attention from the DoJ comes after major Barclays shareholders have already warned that their support for Mr Staley is wearing thin after an unrelated investigation was launched by UK regulators into his attempts to unveil the identity of a whistleblower.
No formal investigation regarding “no-poach” issues has yet been launched, those people cautioned, and it is common for the DoJ to ask for details then decide no further action is warranted. While there were requests from the DoJ a few months ago, inquiries have since gone quiet, people familiar with the situation said. But they added there had been no formal notice from the DoJ that the matter had been closed.
Defectors from JPMorgan to Barclays last year included Tim Throsby, head of the British group’s corporate and investment bank; Paul Compton, chief operating officer; and CS Venkatakrishnan, chief risk officer.
In October, the DoJ published guidance over so-called “no-poach” agreements. “Naked wage-fixing or no-poaching agreements among employers, whether entered into directly or through a third-party intermediary, are per se illegal under the antitrust laws,” the guidance reads, adding that there could be criminal proceedings against no-poaching deals.
It is unclear whether the DoJ is weighing a civil or criminal investigation at this time.
Barclays and the DoJ declined to comment.
– Copyright The Financial Times Limited 2017
