Barclays boss Jes Staley quits over investigation into links with Jeffrey Epstein

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Jes Staley has quit as chief executive of Barclays (PA)
Jes Staley has quit as chief executive of Barclays (PA)

Barclays boss Jes Staley has stepped down after an investigation into his relationship with convicted sex offender Jeffrey Epstein.

The bank said on Monday that Mr Staley would step down after receiving the draft findings of a probe by UK financial regulators on Friday.

After receiving the report, which looked into whether the bank and Mr Staley played down his relationship with Epstein, the chief executive quit the bank and said the conclusions will be contested.

It is understood the early draft suggests he played down his role in Mr Epstein’s affairs while he ran JP Morgan’s private bank from 2000.

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) launched a probe last year into Mr Staley’s dealings with Mr Epstein and the way he later characterised the relationship. Its final report is expected to be published next month.

Barclays said that, in light of the probe’s preliminary findings, and Mr Staley’s intention to contest them, the chief executive had chosen to step down.

A Barclays spokesperson said: “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.”

Mr Staley’s name and several of his phone numbers appear in Mr Epstein's 92-page “black book” of contacts. Mr Staley admitted that he continued his relationship with the disgraced financier for seven years after Mr Epstein was convicted of procuring a child for prostitution in 2008. In 2015, Mr Staley sailed his yacht to Mr Epstein’s private island.

Mr Staley has previously said his last contact with Mr Epstein was in “middle to late” 2015, shortly before he became Barclays chief executive.

At that time, Barclays denied a report that Mr Epstein had lobbied for Mr Staley to get the bank’s top job. The Mail on Sunday reported the existence of emails showing that Mr Epstein backed Mr Staley for the post in 2012. The newspaper said Mr Epstein was acting on his own initiative.

Mr Epstein was arrested on separate charges of child sex trafficking in 2019 and found dead in his prison cell in August that year.

When news of the FCA and PRA investigation broke in February 2020, Mr Staley said that he “deeply regrets” his connection to Mr Epstein.

“It has been very well known I had a professional relationship with Jeffrey Epstein,” Mr Staley told reporters. “It goes back to 2000 when I was asked to run the JP Morgan private bank and he was already a client when I joined the private bank.

“The relationship was maintained during my time at JP Morgan but as I left JP Morgan the relationship tapered off quite significantly. Obviously I thought I knew him well and I didn’t. For sure, with hindsight with what we know now, I deeply regret having any relationship with Jeffrey.”

Mr Staley will receive a year’s pay, totalling £2.4m, as well as his pension of £120,000 for the year, and any other benefits.

He will be replaced as Barclays chief executive by CS Venkatakrishnan subject to regulatory approval.

Mr Staley told staff in an internal memo seen by Reuters that he did not want his “personal response” to the investigations to be a distraction.

“Although I will not be with you for the next chapter of Barclays’ story, know that I will be cheering your success from the sidelines,” he said.

Barclays’ share price fell 1.6 per cent in early trading on Monday after Mr Staley’s departure was announced.

Mr Staley was previously sanctioned by the FCA for trying to uncover the identity of a Barclays whistleblower. Information provided by the whistleblower in 2016 should have been handed to the bank’s investigations team but instead Mr Staley circulated amongst senior managers.

His six-year spell as chief executive has been defined by a renewed emphasis on investment banking, a move that paid off during the pandemic as volatile markets helped to boost profits.

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