Barclays chief resigns after he ‘misled’ bank over Epstein links
He walks away (with £2.5m) after probe into dealings with paedophile financier
THE boss of Barclays dramatically quit yesterday after ‘misleading’ the bank over his links to the late paedophile Jeffrey Epstein.
Jes Staley had been shown the result of an official City investigation before it is made public.
The American investment banker, chief executive of the high street giant since 2015, will return to the US with a £2.5million payoff.
The announcement immediately wiped £350million off the value of Britain’s third biggest bank yesterday morning, although it was recovering last night.
Regulators investigating the relationship between the two US financiers are understood to have concluded Mr Staley had wrongly ‘played down’ his friendship with Epstein.
Mr Staley, a former Wall Street hotshot, was previously private banker to Epstein, who killed himself in 2019 while awaiting trial for child sex trafficking. In 2009, after Epstein’s conviction for procuring an under-age girl for prostitution, Mr Staley visited the billionaire in Florida during his 18-month sentence.
In common with the Duke of York and others, Mr Staley remained loyal to the paedophile financier for several years after his downfall.
In 2015, weeks before joining Barclays, Mr Staley and his wife sailed their 90ft yacht Bequia to Epstein’s private Caribbean island Little Saint James for lunch. It became known as ‘paedophile island’ after Epstein carried out many of his sick crimes against underage girls there.
Barclays was caught on the hop by the findings from the City watchdog the Financial Conduct Authority (FCA). As late as Friday afternoon, the bank was still planning for its boss to attend talks at the Cop26 summit in Glasgow. But yesterday it announced his sudden resignation.
Barclays said Mr Staley planned to contest the inquiry’s conclusions, adding: ‘It should be noted that the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.’
The 20-month investigation by the FCA looked into Mr Staley’s ‘characterisation’ of the pair’s relationship.
He had assured the bank it was ‘professional’ when Barclays was caught in a storm of questions over his links to Epstein when the financier was arrested. When the FCA investigation was launched in February last year, Mr Staley said: ‘For sure, with hindsight with what we know now, I deeply regret having any relationship with Jeffrey.’
Yesterday the FCA gave no details of its conclusions, which are expected to be made public eventually.
City commentator Susannah Streeter, of Hargreaves Lansdown, said: ‘It’s clear the conclusions of the probe are critical. Although detail is limited, it appears regulators believe there was a distinct lack of transparency over this relationship.’
Stepping down yesterday, Mr Staley told Barclays staff: ‘The reasons for my decision are simple. The FCA let me know on Friday evening the draft conclusions of their investigation into the characterisation of a professional relationship I developed earlier in my career.
‘I do not want my personal response to those matters to be a distraction from the fantastic work you do.’
Mr Staley’s pay-off is worth more than £2.5million including £120,000 in pension contributions and a swathe of company benefits while he remains on gardening leave. His total earnings since he started in 2015 will have
‘I deeply regret relationship’
‘Distinct lack of transparency’
hit more than £27million by the time his notice period ends next year.
The bank will also pay for Mr Staley and his Brazilian interior designer wife Debora to relocate to the US.
The FCA examined a cache of emails between Mr Staley and Epstein. Supplied by JP Morgan and dating back to Mr Staley’s time as an executive at the investment bank, they are said to show his relationship with Epstein was friendlier than he claimed.
The pair first met in 2000 when he was asked to run JP Morgan’s private bank and Epstein was a client.
The report into Mr Staley may take years to emerge in public if he decides to proceed in challenging its findings. First it would be referred to the FCA’s Regulatory Decisions Committee, then potentially to the court system.
In 2018 Mr Staley was fined more than £640,000 by the FCA for attempting to unmask a whistleblower who had raised concerns at Barclays.
THE new boss of Barclays heaped praise on Jes Staley as he vowed to press on with the strategy started by his ‘manager, mentor and friend’.
CS Venkatakrishnan told shell-shocked staff in an email that he would ‘continue our existing plans to transform our organisation and build on our financial prowess’.
The message to 84,000 Barclays bankers around the world followed the sudden exit of Staley over his links with paedophile Jeffrey Epstein.
‘Jes has been my manager, mentor and friend for many years,’ Venkatakrishnan said in the memo.
‘He became chief executive of Barclays in one of our darkest hours and devised and implemented a successful recovery strategy of outstanding vision.’
The new Barclays boss – his full name is Coimbatore Sundararajan Venkatakrishnan but he is known as Venkat – takes the reins on a package worth up to £9m a year. In a clear signal he plans to emulate Staley’s commitment to the investment banking arm, his message went on: ‘The strategy we have in place is the right one, and we will continue our existing plans to transform our organisation and build on our financial prowess. I know that with continued focus on delivery the best is yet to come.’
Soon after joining Barclays from JPMorgan in 2015, Staley returned to his former bank to poach Venkat along with Australian Paul Compton.
Staley described them as ‘two of the best bankers I know’ and last year both were promoted to senior roles in Barclays’ investment bank as the board tested their mettle while trying to decide who would eventually take the top job. Those succession plans were put on fast-forward yesterday as the City was left stunned by Staley’s departure.
One senior analyst said: ‘I wouldn’t have been surprised if Barclays had announced Staley’s departure next year, but we weren’t expecting it so soon.’
Even Barclays itself was left in the lurch by the Financial Conduct Authority’s report into Staley’s links to Epstein.
As recently as Friday afternoon, it had been planning for Staley to represent the bank at this week’s Cop26 climate talks.
And the bank could not yet confirm whether or not Indian-born Venkat, who holds US nationality and is based in New York, would even move to the UK as he takes the reins as Barclays boss. A respected City insider said: ‘I don’t see how you can have the chief executive of a British bank who’s not based in Britain.’
Barclays said Venkat had been its ‘preferred candidate’ for over a year having been promoted to head of global markets.
Joseph Dickerson, at Jefferies, said: ‘Venkat’s appointment creates continuity in the strategy. He’s well-respected and investors generally like him.’
Venkat will be paid slightly more than his predecessor – his base wage will be £2.7m, compared with Staley’s £2.4m, so his maximum bonuses will be proportionally larger. Staley said he plans to contest the FCA’s findings. The report will not be published until the process is complete.