Jes Staley: Barclays CEO resigns after Jeffrey Epstein links investigation

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The Bank of England’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) investigation was disclosed by Barclays in early 2020 and focused on how Staley characterized the relationship with his employer.

Barclays and Staley were briefed by the FCA and PRA on Friday evening of the preliminary findings of their investigation.

“In view of these findings and Mr. Staley’s intention to challenge them, counsel [of Barclays] and Mr Staley have agreed to step down as group chief executive and a director of Barclays, ”Barclays said in its statement on Monday.

“It should be noted that the investigation fails to conclude that Mr. Staley saw or was aware of any of Mr. Epstein’s alleged crimes, which was the central issue underlying Barclays’ support for Mr Staley following Mr Epstein’s arrest in the summer of 2019, “the bank added, saying it was not appropriate for it to comment further.

A spokesperson for the FCA and PRA said regulators “do not comment on ongoing investigations or regulatory proceedings” beyond confirming the actions detailed in the Barclays statement.

The relationship started at JPMorgan

Epstein, multimillionaire and convicted pedophile who was charged with sex trafficking by US federal prosecutors, died in a New York jail cell in 2019 while awaiting trial.
Staley had been running Barclays since the end of 2015. Prior to that he worked for over 30 years at JP Morgan (JPM), where he headed the investment banking division. His relationship with Epstein dates back to 2000, when he became director of private banking at JPMorgan.

“He was already a client. The relationship was maintained during my time at JPMorgan, but when I left Morgan it shrank considerably,” Staley told reporters on a call in February 2020.

When asked if he regretted his relationship with Epstein, Staley said, “Obviously I thought I knew him well and I didn’t know him. And looking back at what we all know now. , I deeply regret having had a relationship with Jeffrey Epstein. “

Staley had told the Barclays board that he had not had any contact with Epstein since he became CEO of Barclays in December 2015.

“Although details are limited, it appears regulators believe there was a glaring lack of transparency on this relationship,” said Susannah Streeter, senior investment and markets analyst at UK brokerage Hargreaves Lansdown. “It is understood that Mr Staley will challenge the findings, and the board clearly wants to take Barclays away from what could be a long process.”

The Wall Street veteran had previously had problems with British regulators. In 2018, the FCA fined him around $ 870,000 after it emerged he had attempted to identify a whistleblower at the bank. Staley had attempted to find out who the author of an anonymous letter raised concerns about a senior Barclays employee.

He apologized for his behavior and admitted that he had “made a mistake”. Barclays recovered approximately $ 680,000 of his 2016 salary for the incident.

Barclays shares decline

But its loss is a blow to one of the few European companies still committed to competing with the largest American investment banks.

Barclays shares fell 3.7% in London and were last trading down 1.5%. They have jumped 35% so far this year, part of a broader rally in bank stocks fueled by the economic recovery.

Barclays wants to compete on Wall Street.  It got easier

“The [Barclays] The board of directors is disappointed with this result, “the bank said in its statement.” Mr. Staley has successfully led the Barclays Group since December 2015 with real commitment and competence. Supported by the senior team that he greatly helped to build and on which the Barclays Group will rely for the future, Mr. Staley clarified the Barclays Group strategy, transformed its operations and significantly improved its results. “

Effective November 1, 2021, CS Venkatakrishnan will assume leadership of Barclays, subject to regulatory approval. Venkat, as he is known at the bank, previously served as Head of Global Markets at Barclays from October 2020 and Group Risk Director from 2016 to 2020. Prior to joining Barclays in 2016, he worked at JPMorgan Chase from 1994.

Staley will receive his annual fixed salary worth £ 2.4million ($ 3.3million) in cash and stocks, plus a retiring allowance of £ 120,000 ($ 164,000) and others benefits until October 31, 2022. He will also be eligible for moving expenses to the United States.

“No decision has yet been made on further compensation payments to be made to Mr. Staley,” added Barclays.


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