Barclays attacked by activist investor over CEO’s Epstein links

Barclays is facing a fresh attack from the activist investor Edward Bramson after the bank revealed UK regulators are investigatingits chief executive over links to the sex offender Jeffrey Epstein.

Bramson, who holds a 5.5% stake in Barclays through his investment vehicle Sherborne Investors, said the investigation into Jes Staley’s relationship with the disgraced financier was yet another embarrassment for the bank and the latest sign of poor governance by its board.

In a letter to Sherborne investors, Bramson said: “Several months ago we raised our concerns with you about the regulatory issues and the consequences for Barclays of the Epstein imbroglio in the US and, as it now turns out, in the UK as well. This is another example of governance weakness that has led, inevitably, to the recurrent public disappointments and embarrassments which have plagued Barclays for so long.”

It is the latest in a long-running battle between Barclays and Bramson, who has tried to force the group to scale back its investment banking division since building up a major stake in the bank in early 2018. The activist investor also tried to push his way on to the board last year, but failed to gain shareholder support.

Barclays revealed that Staley was the subject of an investigation by the Financial Conduct Authority and Prudential Regulation Authority when it released full-year earnings last week. It said the investigation was focused on whether Staley had been sufficiently transparent about his relationship with Epstein, who died in prison in August 2019 while awaiting trial on charges of sex-trafficking underage girls.

However, the inquiry was originally launched in December after emails between the two men were handed to UK regulators by their counterparts in the US. Staley’s former employer JP Morgan supplied the emails to US authorities.

It comes less than two years after Staley was personally fined almost £650,000 for attempting to unmask a whistleblower at Barclays in 2016.

Bramson has not yet raised his concerns about Staley’s links to Epstein with the Barclays board, but has requested a meeting with the chairman, Nigel Higgins, following the announcement.

“We are hopeful that the board will treat these matters seriously and that Mr Higgins will be able to indicate what long-term governance changes the board will make to end this cycle of disruption,” Sherborne’s letter said.

Staley, who joined Barclays in 2015, has said he developed a relationship with Epstein in 2000 when he became the boss of JP Morgan’s private bank, which counted Epstein among its wealthy customers. But the two men stayed in touch for more than seven years after the financier was convicted of soliciting prostitution from a minor in 2008.

Staley even visited Epstein in Florida while he was still serving his sentence and out on work release in 2009, but said the relationship tapered off after he left JP Morgan in 2013. He made a final visit to Epstein’s private Caribbean island with his wife in the final months of 2015, but says contact ceased by the time he joined Barclays in December that year.

The bank announced on Tuesday that it is moving its annual shareholder meeting this year to Glasgow, having traditionally held it in London. The meeting is likely to be dominated by questions over the investigation into Staley, and a shareholder resolution urging Barclays to phase out financing to fossil fuel companies. Barclays said the change of location was meant to celebrate its new tech hub in the Scottish city.

Barclays declined to comment on Bramson’s letter.