Barclays boss: Brace for shock on Staley emails

Chairman calls top investors to warn messages between Epstein and ex-chief are ‘uncomfortable’

THE chairman of Barclays has privately warned shareholders that emails between former boss Jess Staley and convicted sex offender Jeffrey Epstein will be ‘uncomfortable’ to read, The Mail on Sunday can reveal.

Nigel Higgins has contacted some of the bank’s largest investors in the past fortnight in an apparent effort to firefight the unfolding scandal.

Staley suddenly quit earlier this month after seeing the findings of a regulatory investigation into his description of his relationship with Epstein, which he characterised as professional.

The American-born banker plans to challenge the findings of two UK regulators that are investigating whether he misrepresented historic ties to the disgraced billionaire financier.

Epstein apparently committed suicide in 2019 while facing charges relating to the sex trafficking of underaged girls.

The probe has assessed about 1,200 emails that were exchanged between Epstein and Staley, who was working at the JPMorgan private bank at the time of the correspondence.

The Mail on Sunday understands that Higgins, who has seen the report, has told investors that some of the emails between Staley and Epstein will be ‘uncomfortable’ to see because of Staley’s effusive language.

One top 20 shareholder told The Mail on Sunday: ‘We spoke to Higgins after Staley left. He was very open. He said once you read the final report you will have questions for us because it will make for uncomfortable reading.’

Another investor said Higgins described some of Staley’s language in the emails as ‘generous’. The chairman also mentioned that Staley often formed strong relationships with clients and colleagues.

A source said Higgins explained that Staley had to quit after announcing he would battle the regulators as the bank has to operate under their purview – which made his position indefensible.

Staley has hired Kathleen Harris, a lawyer at Arnold & Porter, to contest the findings of the joint investigation by the Financial Conduct Authority and the Prudential Regulation Authority.

The FCA could publish a detailed ‘notice’ that includes excerpts from the emails – even if the case goes through the court system.

The concern is that the excerpts will suggest that Staley was closer to Epstein than he had originally stated.

The warning from Higgins comes after he publicly supported Staley when the regulatory investigation emerged last February.

The bank said at the time: ‘The board... believes that 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 re-election at the Annual General Meeting.’

The report’s publication could come as an embarrassment for Higgins and the board, who had been notified about the cache of emails as early as 2019.

The recent phone calls may be seen as an effort to distance the board from the situation and prepare investors ahead of publication.

Staley first met Epstein in early 2000 when the latter was a customer of JPMorgan. Staley also visited Epstein in 2009 while he was serving a prison sentence for soliciting prostitution from a minor.

The American banker also sailed his yacht, the Bequia, to Epstein’s private retreat in the Caribbean just months before becoming chief executive of Barclays in December 2015.

As soon as Staley announced his departure from Barclays, the bank promoted CS Venkatakrishnan – known as ‘Venkat’ – as chief executive. Venkat has been holding separate calls and meetings with leading shareholders over the past week in New York.

He was hired by Staley – who had worked with him at JP Morgan – as chief risk officer of Barclays in 2016.

One top shareholder who has spoken to Venkat in the past fortnight said: ‘He has zero tolerance for misconduct.’

Shareholders have raised concerns over the fact that Staley will continue to receive his £2.4million salary along with a £120,000 pension allowance and other perks until October.

A spokesman for Staley said: ‘Mr Staley intends to contest the initial findings of the FCA and PRA investigation.

‘He will not be making any further public statements at this point.’

Barclays declined to comment.