Former Barclays boss Jes Staley fined and banned over Jeffrey Epstein

  • Staley fined £1.8m and banned for life
  • FCA blasts ex-Barclays boss over Epstein 
  • Bank strips him of £18m of bonuses

By JESSICA CLARK

Updated:

Keeping quiet: Former Barclays boss Jes Staley

Keeping quiet: Former Barclays boss Jes Staley

Former Barclays boss Jes Staley has been fined and banned from senior jobs in finance for misleading regulators over his friendship with paedophile Jeffrey Epstein.

In a damning report, the Financial Conduct Authority (FCA) said the banker acted 'recklessly' and with 'a lack of integrity' while at Barclays by insisting he was not close to the convicted sex offender.

Staley told regulators that his last contact with Epstein – who was also a friend of Prince Andrew – was 'well before' he was named the chief executive in October 2015.

In reality, emails between the two show Staley described Epstein as one of his 'deepest' and 'most cherished' friends. He was also in contact with Epstein three days before his appointment at Barclays was announced.

The FCA yesterday fined Staley £1.8m and banned him from holding any senior management position in finance.

'Mr Staley recklessly misled the FCA and acted with a lack of integrity,' it said. In response, Barclays said it would claw back or cancel £17.8m in bonuses and pay Staley was still due to receive.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: 'A chief executive needs to exercise sound judgement and set an example to staff. Mr Staley failed to do this.

'We consider that he misled both the FCA and the Barclays board about the nature of his relationship with Mr Epstein.'

She added: 'It is right to prevent him holding a senior position in the financial services industry if we cannot rely on him to act with integrity by disclosing uncomfortable truths about his close personal relationship with Mr Epstein.'

Staley and Epstein met around the turn of the century when the former was head of JP Morgan bank and the latter was a client.

Epstein was arrested in the US on sex trafficking charges in July 2019, and killed himself in prison the following month. He had already been convicted on child prostitution charges in 2008.

The FCA asked Barclays in August 2019 what it had done to make sure there was no impropriety in the friendship between Staley and Epstein.

In a letter approved by Staley, Barclays said it was not a close friendship and their last contact had been 'well before' the 2015 appointment as chief executive.

The FCA said that these two statements were 'inaccurate and misleading'. Staley plans to appeal against the decision.

The regulator published email extracts between Staley and Epstein as evidence.

In November 2009, a year after Epstein's 2008 conviction, Staley wrote: 'I owe you much. And I deeply appreciate our friendship. I have few so profound.'

In January 2015, Staley said: 'The strength of a Greek army was that its core held shoulder to shoulder, and would not flee or break, no matter the threat. That is us.' In October 2015, before Barclays announced his appointment, he said: 'You never wavered in our friendship these last three years. That means a lot too [sic] me.'

The pair discussed Staley's career in October, including the confidential information that he had secured the top job at Barclays, contrary to the claims made in the letter to the FCA.

The regulator said Staley had misled Barclays.

He had 'an interest in giving Barclays the impression of a greater distance… than was the case' and was 'aware of the risk' their association 'posed to his reputation and career', it said. Via his lawyer, Staley said: 'If I had known who Jeffrey Epstein really was, there is absolutely no doubt that I wouldn't be in the position I am in today.

'Prior to undertaking my former role, it was known that I had a relationship with Jeffrey Epstein. I am very disappointed by the FCA's decision and I will continue to challenge it.'

Bank board under fire for appointment 

The Barclays board is facing fresh questions over its decision to hire Jes Staley.

Three days before he was officially named chief executive in October 2015, the Mail on Sunday revealed Jeffrey Epstein was backing his bid to get the top job.

Despite the links, Barclays chairman John McFarlane and head of the nominations committee Sir Michael Rake went ahead with the appointment.

Speaking on the day of the hire, Rake said: 'I took the responsibility of finding an outstanding leader for Barclays extremely seriously. Jes Staley is the right man for that role.'

In November 2021, Staley lost his job over his links to Epstein.

Yesterday's report by the FCA is also an embarrassment for current Barclays chairman Nigel Higgins, who took over from McFarlane in May 2019.

In August that year, the FCA asked Barclays to explain what it had done to make sure that there was no impropriety between Staley and Epstein.

The response from the bank, which relied on information supplied by Staley, was 'misleading', the FCA said, leading to yesterday's fine and ban.

Observers have suggested that the bank should have probed Staley harder.

Russ Mould, analyst at AJ Bell, said: 'It's beholden to the board to do the hard work.'

Tory MP Iain Duncan Smith said: 'This whole affair reflects badly on the board. It has caused untold reputational damage. The board haven't done their due diligence.

'They didn't want to know and so didn't go and find out.'

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