Despite Libor Failures, Former Barclays Compliance Officer Moves Up The Ladder
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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Beth Connolly is Editor-in-Chief of the Wall Street Job Report and the Compliance Exchange. She blogs creatively at When Nutmeg Met Basil. Connect with her on LinkedIn , Twitter, and About.Me.
4 comments
Happens all the time. I’m a mid level compliance manager and have, at various firms, emailed superiors on numerous occasions regarding concerns and red flags and seeing nothing being done. If people like me choose to pursue it, we get labelled as trouble makers, get negative reviews (called non-team players) and as a result get blackballed or worse. People like us make a conscious choice: do the right thing or have a job and feed our families. Which one do you think we choose?
by Chris on September 21, 2012 at 3:59 pm. #
Chris, you are so right. I finally found another job and left a compliance job at TD because I could no longer stand the amount of cover up and ineptitude that goes on. The regulators have no idea what is discovered and never dealt with, or just not handled properly. The bank should be rewarding employees who identify issues that could ultimately cause their shareholders a lot of harm. Instead they label you an alarmist and tell you that if you want your career to thrive then you’d better just keep your head down and “go along to get along”.
by Bob on September 26, 2012 at 11:44 am. #
Well – TD Bank lost a court case and now has to reimburse investors who lost their money in a Ponzi Scheme operated by Scott Rothstein. TD Bank was accused of aiding and abetting the fraud and recently faced more court action for altering documents that were presented in court at trial.
Google it – the whole thing is a mess!
by Bonnie on September 26, 2012 at 7:11 pm. #
It does not sound that regulators nor the bank management/shareholders understand the consequences of facilitating such behaviors : less confidence from clients, bankers more and more percieved like “thieves”. Then, politics to decide to implement more and more rules (not always appropriate) , requesting more controls.The resukt is more costs, less confidence in financial market and at the end and an industry which starts to be less and less competitive…..as often short term views!
by sqsqsqsq on September 29, 2012 at 10:05 am. #