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Barclays Backs CEO After Epstein Relationship Explanation

Tom Burroughes

13 February 2020

Barclays today said it has full confidence in chief executive Jes Staley amid an investigation into how he has explained his relationship with Jeffrey Epstein, the disgraced financier who died last year in a US detention centre. 

The UK-listed bank, which reported its 2019 calendar year financial results yesterday, said its board of directors looked at media reports over the past six months that had highlighted “historical links between Mr Staley and Jeffrey Epstein”.

(Barclays’ results don’t split out performance of its wealth and investment business. At the overall group level, the bank yesterday said Group profit before tax was £4.4 billion (2018: £3.5 billon), including an additional provision for Payment Protection Insurance (PPI) of £1.4 billion (2018: £400 billion). Profit before tax, excluding litigation and conduct, was £6.2 billion (2018: £5.7 billion).)

“As has been widely reported, earlier in his career Mr Staley developed a professional relationship with Mr Epstein. In the summer of 2019, in light of the renewed media interest in the relationship, Mr Staley volunteered and gave to certain executives, and the chairman, an explanation of his relationship with Mr Epstein. Mr Staley also confirmed to the board that he has had no contact whatsoever with Mr Epstein at any time since taking up his role as Barclays Group CEO in December 2015,” the bank said in a statement to the London Stock Exchange. 

The statement noted that the Financial Conduct Authority, the UK watchdog, had looked at this relationship. The bank regulator, the Prudential Regulation Authority, carried out an enquiry, which continues, into “Mr 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 bank said that based on a variety of information it has, it believes that 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 bank added that it continues to cooperate with a regulatory investigation.

The Epstein saga has rocked the business, political and entertainment world in recent years. As reported here last year, banks and financial firms cut ties with the UK's Prince Andrew after he gave an interview about his relationship with Epstein. The interview was described at the time as a "car crash". The way that various firms have severed ties with Prince Andrew is an example of how organisations’ reputational management has to move rapidly.

Barclays' Staley worked at JP Morgan for more than 30 years before becoming Barclays’s CEO in December 2015. The Wall Street Journal said he told journalists yesterday that his contact with Epstein went back to 2000, when he led JP Morgan’s private bank and the financier was a client. He said that his contact with Epstein began to “taper off” after he left JP Morgan in 2013 and the last time he had contact with him was in the “middle to fall” of 2015.

“I thought I knew him well and I didn’t,” Staley was quoted as saying. “For sure, with hindsight, with what we all know now, I deeply regret having had any relationship with Jeffrey Epstein.”

Epstein was found dead in August last year at a New York detention centre, where he was awaiting trial on federal sex-trafficking charges, in what the New York medical examiner ruled as a suicide.