Barclays CEO Staley leaves after Epstein investigation

Barclays chief executive Jes Staley is leaving the bank after a dispute with UK financial regulators over how he described his connections to convicted sex offender Jeffrey Epstein.

Staley will be replaced as managing director by the bank’s head of global markets, CS Venkatakrishnan, who on Monday pledged to continue his predecessor’s strategy for Britain’s third-largest bank in terms of market value. Staley’s shocking departure comes after Barclays was informed on Friday of the unpublished findings of a report by the UK Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA) on Staley’s characterization of his relationship with Epstein, who committed suicide in prison in August 2019 while awaiting trial on charges related to sex trafficking.

“In light of these findings and Mr. Staley’s intention to challenge them, the Board of Directors and Mr. Staley have agreed that he will step down as Group Managing Director and Director of Barclays,” he said. declared the bank. “It should be noted that the investigation fails to conclude that Mr. Staley saw or was aware of any of Mr. Epstein’s alleged crimes, which was the central issue underlying Barclays’ support for Mr. Staley following Mr. Epstein’s arrest in the summer of 2019, “he said in a statement.

The investigation has yet to be released, although regulators have previously said it is focusing on Staley’s veracity about his ties to Epstein. If it turns out that Staley has misled regulators, he risks a fine, a UK financial industry ban, or both.

Barclays stock fell 2% after the announcement, before cutting losses to trade down 1% at 1:15 p.m. GMT, underperforming European rivals. “I THOUGHT I KNOW HIM WELL”

Staley dealt with Epstein during his long career at JPMorgan, where Epstein was a major private banking client until 2013. A college dropout who presented himself as a brilliant financier, Epstein socialized in circles of elite, including past and future US presidents. In 2008, he was registered as a sex offender but continued to maintain ties with powerful players in business and finance.

The New York Times reported in 2019 that Epstein referred “dozens” of high net worth clients to Staley. He reported that Staley visited Epstein in prison while serving a sentence between 2008 and 2009 for soliciting prostitution from a minor, while Bloomberg reported he visited the private island of Epstein in 2015. Staley told reporters last February that his relationship with Epstein had “waned.” significantly “after leaving JPMorgan in 2013, and hadn’t seen the financier in disgrace since taking over as CEO of Barclays in 2015.

“I thought I knew him well, and I didn’t know it. I’m sure with hindsight of what we all know now, I deeply regret having had a relationship with Jeffrey Epstein,” he said. he stated at the time. Epstein’s ties to eminent men returned to haunt some of them.

Billionaire investor Leon Black has resigned from Apollo Global Management, the private equity firm he co-founded, more early this year after a review found he paid Epstein $ 158 million for tax and estate planning. British Prince Andrew has stepped down from royal duties due to his associations with Epstein then that Microsoft co-founder Bill Gates said it was a “huge mistake” to spend time with the financier.

UK regulators FCA and PRA said in a statement they could not comment further on the Epstein investigation, which was launched after JPMorgan provided them with emails between Epstein and Staley from Staley’s days as head of JPMorgan’s private bank, the Financial Times reported last year. THE RIGHT STRATEGY

Staley told staff in an internal memo seen by Reuters that he didn’t want his personal response to the investigations to be a distraction. “While I will not be with you for the next chapter in Barclays history, please know that I will be cheering for your behind-the-scenes success,” he said.

Staley has 28 days to formally notify the FCA that he is contesting his findings, after which an independent committee within the watchdog will either confirm or reject his findings, a source familiar with the process told Reuters. If upheld, the investigation goes to an independent higher tribunal that can again support or reject the findings, the source said, in a process that could take months.

The bank’s new CEO Venkatakrishnan, who has followed Staley to Barclays from JPMorgan and is known as Venkat, told staff on Monday that the strategy his predecessor put in place was “the correct one,” according to a separate memo. also seen by Reuters. Venkat added that he would announce changes in the organization of the investment bank in the coming days, likely to fill his previous position and any resulting vacancies, sources at the bank said.

Barclays’ stock price has fallen 9% since Staley’s joined the bank almost six years ago, a term not without controversy. His greatest success, according to insiders and analysts, has been to fight a campaign by activist investor Edward Bramson in 2018 to have Staley withdrawn on the grounds that Barclays’ investment bank was underperforming and should be downsized. .

Bramson sold his stake earlier this year, and the bank’s recent results have shown the investment bank to be performing well. Also in 2018, UK financial regulators and Barclays fined Staley a combined £ 1.1million ($ 1.5million) after he tried to identify a whistleblower who sent letters criticizing a Barclays employee. .

(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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