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