Published: Fri, February 14, 2020
Economy | By

UK regulators probe Barclays CEO's link to Jeffrey Epstein

UK regulators probe Barclays CEO's link to Jeffrey Epstein

On Thursday morning, alongside its full-year numbers, the FTSE 100 lender revealed that the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) were both investigating transparency issues over Staley's professional relationship with disgraced financier Jeffrey Epstein.

"The FCA. subsequently commenced an investigation, which is ongoing, into Mr Staley's characterization to the company of his relationship with Mr Epstein and the subsequent description of that relationship in the company's response to the FCA".

Analysts said that Barclays PLC (LON:BARC) chief executive Jes Staley's job is teetering on the edge after further scrutiny of his behaviour overshadowed the bank's annual results.

Epstein died in a NY jail in August while he was awaiting trial on sex trafficking charges.

Despite his conviction, Epstein kept in touch with Staley even after the latter left JP Morgan.

Another mishap was the board's decision drop its 10%-plus return on equity target for 2020, while a lower risk loan portfolio led to tighter net interest margin. Starting in 2000, Epstein regularly brought Staley business when he ran JPMorgan's private bank and the two were close professionally, a person familiar with the matter said past year.

Barclays said it believes Staley has been "sufficiently transparent" about his relationship. He declined to state his personal opinions on the situation, though he reportedly said in June 2019 that Staley represents "all that is great about Bowdoin and the culture and the values here".

Mr Staley said: "It has been very well known I had a professional relationship with Jeffrey Epstein".

"Staley also confirmed to the board that he has had no contact whatsoever with Mr. Epstein at any time since taking up his role as Barclays Group CEO in December 2015".


Barclays shares fell 2.3 per cent on Thursday.

Staley has said that Barclays' mix of investment and retail banking businesses should partly insulate it from economic and market fluctuations.

At the beginning of his tenure at Barclays, Staley repeatedly and improperly attempted to unmask the identity of whoever sent letters to members of the bank's board and another executive.

A Barclays spokesman, Tom Hoskin, said on Thursday's conference call that "there's always the option to make an adjustment" to Staley's compensation, given how pay is deferred for the bank's directors. It goes back to 2000 when I was asked to run the JP Morgan private bank and he was already a client when I joined the private bank.

Repercussions from the Epstein scandal continue to roil the business and political worlds, given the his decades of cultivating ties to US and British elites. "The head of private banking you should talk to - Jes Staley". (A spokesman told the Times Staley had not been aware).

Staley visited Epstein in Florida when he was serving his sentence following a 2008 guilty plea of soliciting prostitution, in one case with a minor, according to a New York Times report a year ago.

But several questions remain unanswered, including why the Barclays boss continued the relationship despite Epstein's conviction.

"Obviously I thought I knew him well and I didn't", Staley told journalists Thursday.

-With assistance from Marion Dakers and Donal Griffin.

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