- Barclays says its CEO is being probed by UK regulators over his relationship to Jeffrey Epstein.
- The board is backing Staley for now, saying the CEO has been “sufficiently transparent with the company.”
- “Like Teflon: that’s one way to describe CEO Jes Staley,” said Neil Wilson at Markets.com. “Others may be less kind.”
- Visit Business Insider for more stories.
Barclays delivered a bombshell on Thursday, saying that UK financial authorities are investigating its CEO Jes Staley over his relationship to sex offender Jeffrey Epstein.
Britain’s Financial Conduct Authority, along with the regulatory watchdog, Prudential Regulation Authority are looking 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,” Barclays said in a statement on Thursday while reporting fourth quarter earnings.
Because he has been “sufficiently transparent with the company as regards the nature and extent of his relationship with Mr. Epstein,” the bank said, “Mr. Staley retains the full confidence of the board.”
“Like Teflon: that’s one way to describe CEO Jes Staley,” said Neil Wilson at Markets.com. “Others may be less kind.”
Staley has had wobbles before. In 2018, Staley was slapped with a fine of more than £600,000 ($778,000) by the same UK regulators following his attempts to unmask a whistleblower at the bank in 2016.
“Coming after the whistleblowing fine, it’s looking like the cat may be running out of lives,” Wilson said. “I wonder if he can survive this.”
While “Staley has steered the ship through some choppy waters for European banking,” Wilson said, revenues missed consensus targets. The bank, blaming macro uncertainty and low interest rates, backed down from its goal of a more than 10% return on tangible equity in 2020.
That “takes the shine off things,” Wilson said, and pushed the shares 3% lower in London trading. “Cost-cutting needs to go beyond trimming bonuses.”
The Barclays statement read: “Earlier in his career Mr. Staley developed a professional relationship with Mr. Epstein,” as has been reported by multiple media outlets.
“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 relationship between Mr. Staley and Mr. Epstein was the subject of an enquiry from the Financial Conduct Authority (“FCA”), to which the Company responded.
The Board will continue to cooperate fully with the regulatory investigation, and will provide a further update as and when it is appropriate to do so.”