November 13, 2013 / 5:48 PM / 6 years ago

Former top regulator Sants resigns from Barclays due to stress

LONDON (Reuters) - Britain’s former top financial industry regulator Hector Sants has resigned from Barclays (BARC.L), citing stress and exhaustion, 10 months after joining the bank as head of compliance.

Barclays said on Wednesday its head of technology, Shaygan Kheradpir, had also resigned to become chief executive of Juniper Networks (JNPR.N), dealing a double blow to Chief Executive Antony Jenkins’ attempts to revive the bank and restore its reputation.

Sants, 57, had been on sick leave since the beginning of October, and decided he will not be able to return to work in the near term so has resigned, Barclays said.

The former investment banker ran Britain’s Financial Services Authority (FSA) through the financial crisis and joined Barclays at the start of this year, but he is the latest executive to show the strains of the financial crisis and its aftermath on employees’ health.

Lloyds Banking Group (LLOY.L) Chief Executive Antonio Horta-Osorio took two months off at the end of 2011 on doctors’ orders after suffering sleep deprivation and exhaustion. He returned to work in early 2012 and has been praised for leading Lloyds’ turnaround and has been held up as an example to counter the stigma of mental illness.

Hiring Sants was seen as a coup for Barclays after it was fined $450 million in summer 2012 by the FSA and U.S. regulators for attempted manipulation of Libor interest rates.

Sants, who was knighted in 2013 for services to financial services and regulation, was tasked with helping Jenkins restore Barclays’ reputation and improve relations with regulators.

He had a busy start as the bank came under scrutiny for several conduct issues, including an investigation into advisory fees to Qatari investors who helped bail it out during the financial crisis and a $453 million fine imposed by a U.S. energy regulator in July.

Barclays is also among several banks who have paid out billions of pounds in compensation to customers mis-sold products and the industry is now under scrutiny for alleged manipulation of foreign exchange markets.

Sants was FSA chief executive from 2007 to 2012 after joining the regulator in 2004. He previously worked at Credit Suisse CSGN.VX and UBS UBSN.VX.

He is reported to have been on an annual pay package of 3 million pounds at Barclays, compared to 836,000 pounds in his last year at the FSA.

Barclays shares closed down 2.8 percent at 249.5 pence in a weaker European banking index. Analysts said the departures were a setback for Jenkins, but should not derail his turnaround efforts.

Kheradpir will become CEO of Juniper, a network gear maker based in California.

Barclays promoted him to a new role as head of operations and technology in March, after joining from U.S. telecoms firm Verizon at the start of 2011.

The departures mean Jenkins has lost two people from his 13-person executive team.

The bank said it will start internal and external searches for replacements.

Allen Meyer, head of compliance for corporate and investment banking, will take on Sants’ role in the interim. Darryl West, chief information officer, will act as interim chief operations and technology officer, the bank said.

Reporting by Steve Slater; Editing by Matt Scuffham and Louise Heavens

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