Legal
Barclays Backs CEO After Epstein Relationship Explanation
The UK lender says it recommends Jes Staley for re-election and said he had been sufficiently open about his relationship with the deceased financier.
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.