Barclays investors round on chief after ‘embarrassing’ $15bn market gaffe

Barclays’ chief executive has come under fire by its top shareholders following an “almighty c–k-up” over a $15bn (£11bn) trading gaffe which the bank said would cost it £450m.

Investors said the mishap was “embarrassing” for the bank’s chief executive CS Venkatakrishnan, known as Venkat, who was Barclays’ chief risk officer in 2019, when the maximum trading limits were first agreed.  

Barclays admitted on Tuesday that it had mistakenly sold $15.2bn more financial products in the US than it was meant to, which it said will cost it around £450m. A day later it emerged that one of its top investors had sold £900m of stock at a discount overnight.

It is a blow for Mr Venkatakrishnan, who took on the top job in November after Jes Staley’s abrupt exit over his ties to Jeffrey Epstein.

One top 10 investor said that while he still has faith that the new leader is a “force for good”, the incident has rattled shareholders and raised questions about his grip on risk management.

“Inevitably as [Mr Venkatakrishnan is] a former chief risk officer, questions will be asked,” he said. “For the stock overall, it’s a concern, as the control environment is very important in an investment bank.” 

Another top 20 shareholder said: “Clearly it’s embarrassing for them with the new chief executive having come from a background of being chief risk officer. It’s a decent reminder of the complexity of these institutions and how quickly the cost can ramp up when an error is made.”

A third long-standing shareholder argued that those found to be responsible for this mistake must be penalised by having their bonuses slashed.

“This is an almighty c–k-up – £450m is not insignificant,” he said. “I can’t see how you can lose that amount of money without consequence. So who has the line of responsibility for that function? It’s a failure of regulatory oversight and someone has to get hit.”

His comment echoes calls from shareholders for outgoing finance chief Tushar Morzaria to have his bonuses docked over the error. Mr Morzaria, who announced plans to step down in February after more than eight years in the role, earned more than £5m in 2021, £1.5m of which was awarded as a deferred annual bonus.

A fourth investor said the blunder has come as a shock to Barclays’ long-standing shareholders given that Mr Morzaria is well-regarded when it comes to risk.

“Clearly the c–k-up and loss is deeply frustrating and surprising given Tushar has been a very good CFO and they have worked so hard on risk controls. It will worry the market about controls again,” he said.

Barclays has commissioned an independent review into the incident. Regulatory authorities are also conducting inquiries. A spokesman for Barclays declined to comment. 

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