Watch­dogs in­ves­ti­gate Bar­clays boss Sta­ley af­ter US au­thor­i­ties hand over Ep­stein emails

The Guardian - - Financial - Ka­ly­eena Mako­rtoff Bank­ing correspond­ent

The City watch­dog and the Bank of Eng­land are in­ves­ti­gat­ing the Bar­clays chief ex­ec­u­tive, Jes Sta­ley, over his links to the sex of­fender and dis­graced fi­nancier Jef­frey Ep­stein.

The in­quiry was launched af­ter emails be­tween the two men were handed to the UK reg­u­la­tors by their coun­ter­parts in the US.

Bar­clays bank re­vealed the in­ves­ti­ga­tion in a state­ment to the stock ex­change. It said the Fi­nan­cial Con­duct Au­thor­ity (FCA) and Pru­den­tial Reg­u­la­tion Au­thor­ity (PRA) – part of the Bank of Eng­land that over­sees banks – launched the in­quiry in De­cem­ber.

Bar­clays said it fo­cused on Sta­ley’s “char­ac­ter­i­sa­tion to the com­pany of his re­la­tion­ship with Mr Ep­stein and the sub­se­quent de­scrip­tion of that re­la­tion­ship in the com­pany’s re­sponse to the FCA”.

The Amer­i­can bank­ing boss, who joined Bar­clays in 2015, says he de­vel­oped a re­la­tion­ship with Ep­stein in 2000 when he was hired to lead the pri­vate bank at JP Mor­gan that deals with wealthy cus­tomers. Ep­stein was al­ready a JP Mor­gan client when Sta­ley joined.

It is com­mon for bankers to work closely with wealthy clients, whose ac­counts are lu­cra­tive. But Sta­ley stayed in touch with Ep­stein for seven years af­ter the fi­nancier was con­victed of so­lic­it­ing pros­ti­tu­tion from a mi­nor in 2008. Sta­ley vis­ited Ep­stein in Florida while he still serv­ing his sen­tence and out on work re­lease in 2009.

The re­la­tion­ship did not end af­ter Sta­ley left JP Mor­gan for the hedge fund BlueMoun­tain Cap­i­tal in 2013. The Bar­clays boss said the re­la­tion­ship started to “ta­per off ” af­ter he left the US bank, with con­tact be­com­ing “much less fre­quent” be­fore it ceased al­to­gether two years later.

But the pair re­mained close enough that Sta­ley’s fi­nal visit in­volved sail­ing his own yacht, the Be­quia, to Ep­stein’s pri­vate Caribbean is­land in 2015.

Sta­ley said his fi­nal con­tact with the fi­nancier was in 2015, shortly be­fore he took over as Bar­clays chief ex­ec­u­tive in De­cem­ber. It is not clear why Sta­ley cut ties with the for­mer bank­ing client.

Sta­ley of­fered to ex­plain his ties to Ep­stein last year, as the me­dia scru­ti­nised their re­la­tion­ship. He shared his ac­count with key ex­ec­u­tives and Bar­clays’ chair­man, Nigel Hig­gins, and told the board that he had no con­tact with Ep­stein since join­ing Bar­clays.

Ep­stein died in prison in Au­gust 2019 while await­ing trial on charges of sex-traf­fick­ing un­der­age girls. A US med­i­cal ex­am­iner ruled that Ep­stein killed him­self.

It is un­der­stood the emails, first re­ported by the Fi­nan­cial Times, sug­gest they were closer than Sta­ley said.

As the in­ves­ti­ga­tion was re­vealed yes­ter­day, Sta­ley said he re­gret­ted his ties with Ep­stein. “Obviously I thought I knew him well, and I didn’t. And for sure with hind­sight of what we all know now, I deeply re­gret hav­ing had any re­la­tion­ship with Jef­frey Ep­stein.”

Bar­clays said it had con­ducted an in­ter­nal review and had no con­cerns over how Sta­ley had char­ac­terised his deal­ings with Ep­stein. A spokesman said it had been aware of the re­la­tion­ship be­fore Sta­ley’s ap­point­ment.

The bank said Sta­ley “con­firmed to the board that he had no con­tact what­so­ever with Mr Ep­stein at any time since tak­ing up his role as Bar­clays Group CEO in De­cem­ber 2015”. Bar­clays has seen the email ex­changes sent to the reg­u­la­tors.

The board said: “Mr Sta­ley has been suf­fi­ciently trans­par­ent with the com­pany as re­gards the na­ture and ex­tent of his re­la­tion­ship with Mr Ep­stein. Ac­cord­ingly, Mr Sta­ley re­tains the full con­fi­dence of the board, and is be­ing unan­i­mously rec­om­mended for re­elec­tion [at the AGM].”

The Ep­stein in­ves­ti­ga­tion comes less than two years af­ter Sta­ley was fined £642,000 for try­ing to un­mask a Bar­clays whistle­blower in 2016.

The news over­shad­owed the re­lease of the bank’s an­nual earn­ings, which showed pre-tax profit rose 25% to £4.4bn. Bar­clays shares closed down nearly 2% at 176p.


The Bar­clays board said it had full con­fi­dence in Jes Sta­ley, de­spite his links to Ep­stein be­ing in­ves­ti­gated

▲ In 2015 Jes Sta­ley sailed his yacht to the Caribbean is­land of Lit­tle St James, which was owned by the dis­graced fi­nancier Ep­stein, above

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