City watchdog investigates Barclays boss Jes Staley's links with Jeffrey Epstein

Andrew Cummings
February 16, 2020

More than most businesses, banks depend on the trust of their customers; the conduct of the boss is critical to that.

Barclays announced Thursday that CEO Jes Staley is being investigated by British financial authorities over ties to financier and accused USA sex trafficker Jeffrey Epstein.

A Wall Street veteran, Staley has remained committed to growing investment banking at Barclays, even as European peers scale back in this area in favor of wealth management.

"Accordingly, Mr Staley retains the full confidence of the board", a statement said.

Staley and the disgraced American financier developed a professional relationship when Staley held a senior position at JPMorgan.

Earlier on Thursday, the bank said its board believes the chief executive has been sufficiently transparent about his ties to Epstein, whom Staley said he had not seen since taking over as Barclays CEO in 2015. Who was the external counsel and how was the review handled?

The probe started in December, Staley said. Chairman Nigel Higgins, in post for less than a year, also needs a a pristine regulatory outcome.

Just how honest Staley has been on his dealings with Epstein is no small distraction, especially when viewed alongside the whistleblower episode.

Epstein died in a NY prison cell on 10 August as he awaited his trial on sex trafficking charges. For decades, he cultivated ties to worldwide elites that included billionaires and royalty. He declined to state his personal opinions on the situation, though he reportedly said in June 2019 that Staley represents "all that is great about Bowdoin and the culture and the values here".

The professional relationship began in 2000 during his days at JPMorgan's private bank, where Epstein was a client. The company concluded that it had no concerns over the way its chief executive characterized the nature and extent of his relationship with the convicted sex offender, The Guardian reports. (A spokesman told the Times Staley had not been aware). As recently as April 2015, just before he joined Barclays, Staley and his wife visited Epstein for several hours at his private Caribbean island.

"The relationship was maintained during my time at JP Morgan but as I left JP Morgan the relationship tapered off quite significantly", Staley said.

"I thought I knew him well, and I didn't", Staley said, as cited by media. "I didn't. For sure, with hindsight of what we all know now, I deeply regret having had any relationship with Jeffrey Epstein".

It may turn out to be a big regret.

The UK lender also reiterated its ambition of achieving a 10 percent return on equity this year, although it repeated a warning from October that the worsening economic outlook might make reaching that target hard.

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