by Beth Connolly on September 21, 2012
There may be times in your career when you find that it is best to do nothing, rather than to act.
The moment when you are confronted with evidence of a culture of dishonesty and fraud at your place of employement is not that moment. Not for most of us, that is.
But for Stephen Morse, Chief Compliance Officer at Barclays Capital (Barclays’ investment bank) from 2002 to 2011, doing nothing actually served his career quite nicely.
In 2008, Morse was contacted with complaints of Libor rate manipulation from an employee and promised to follow up. He never did.
Regardless, he evidently led a successful career at Barclays until 2011, when he was offered an arguably better position as Chief Compliance Officer at TDBank, a major Canadian international investment bank. Morse accepted the offer and quietly slipped out the back door of Barclays just as the Libor rate manipulation probe was gaining steam in the U.K.
According to the Wall Street Journal, here’s what happened back in 2008 at Barclays:
In October 2008, as Mr. Morse was busy with the Lehman deal, the Libor concerns flared up again. A Barclays Capital employee emailed a group of superiors, including Mr. Morse, raising concerns about being instructed to lowball Libor but saying that he intended to follow orders, according to a copy of the email that was released by a parliamentary committee.
Mr. Morse responded five days later from New York. “We obviously need to make sure we follow the…rules,” he wrote. Mr. Morse said in the email that he would “take that up with senior management this week.”
The FSA report said that there was no follow-up beyond the email. “The relevant individual in Compliance thought his email would suffice to ‘nip it in the bud,’” the FSA wrote.
Hmmm…it makes you wonder what major financial scandal is currently brewing at TDBank that Morse will “nip in the bud” with just an e-mail and an unfulfilled promise to follow up?
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