14 Feb 2020
Barclays Plc Chief Executive Officer Jes Staley is being investigated over his ties to disgraced financier Jeffrey Epstein, his second run-in with British regulators since he joined the bank in 2015.
The bank said regulators are probing how Staley characterized his relationship with Epstein, the convicted sex offender who died in his prison cell last year. The newest probe is another distraction for Barclays as it faces additional challenges to meet its profit goals. In 2018, Staley was fined for his attempts to uncover a whistle-blower.
“I deeply regret having had a relationship with Jeffrey Epstein,” Staley, 63, said on a conference call as Barclays reported fourth-quarter results. Barclays said the CEO retains the “full confidence” of the bank’s board.
Staley, a former senior banker at JPMorgan Chase & Co., was among a swath of prominent financiers whose ties to Epstein came under the spotlight after his arrest.
Epstein died in prison after he was arrested last year on charges of sex-trafficking minors. 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 last year.
“The investigation is actually focused on transparency, and whether I was transparent and open with the bank and with the board with respect to my relationship with Jeffrey Epstein,” Staley said on Bloomberg Television. “It’s clear in my own mind, going all the way back to 2015 when I joined Barclays — I have been very transparent with the bank and have been very willing and open to discuss the relationship that I had with him.”
The probe started in December, Staley said. Barclays said earlier that during the summer, Staley “volunteered and gave to certain executives, and the chairman, an explanation of his relationship with Mr. Epstein.” The bank also used “the support of external counsel” to review Staley’s recount of events.
The revelation of the probe overshadowed the bank’s fourth-quarter results. Barclays retained its profitability target for 2020, while warning it will be challenging to achieve given macroeconomic uncertainty and low interest rates. The investment bank, the centerpiece of Staley’s strategy since he took over in 2015 — and a frequent target for criticism by activist investor Edward Bramson — posted revenue in line with analysts’ estimates.
“The regulatory review is bound to raise questions regarding potential repercussions for Staley,” said John Cronin, an analyst at Goodbody in Dublin. “This could put Barclays on slightly weaker ground in the context of any renewed push on the part of the activist shareholder.”
Britain’s Financial Conduct Authority and Prudential Regulation Authority confirmed Staley was being investigated, and declined to comment further.
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. After a year-long regulatory probe into that matter, Staley kept his job, though the FCA and PRA said he failed to behave “with due skill, care and diligence.”
By Stefania Spezzati, Anna Edwards and Matthew Miller, Bloomberg, 13 February 2020
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