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Barclays boss Jes Staley ‘deeply regrets’ Jeffrey Epstein links

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Barclays chief executive Jes Staley has said he “deeply regrets” his connection with Jeffrey Epstein after it emerged that British regulators are investigating his links with the convicted sex offender.

Staley admitted this morning that he maintained contact with with the disgraced financier, who took his own life in a New York jail last year while awaiting trial on sex trafficking charges, for seven years after his conviction.

Barclays announced this morning that the Financial Conduct Authority (FCA) and Bank of England’s Prudential Regulation Authority (PRA) were investigating “Staley’s characterisation… of his relationship with Epstein and the subsequent description of that relationship”.

Staley ‘deeply regrets’ relationship

On a call with reporters about the bank’s annual results, which have been overshadowed by the announcement of the investigation, Staley said he had been “very open” with Barclays about his links to Epstein.

“I thought I knew him very well and for sure, with hindsight, I deeply regret having had any relationship with Jeffrey Epstein”, he said.

Staley took over as Barclays’ chief executive in December 2015, and said that he cut all ties with Epstein the same year.

“I feel very comfortable that going all the way back to 2015, I have been very transparent and open with the bank with respect to that relationship.”

Investigation launched in December

The regulators’ investigation, which Staley said began in December, was launched after the FCA made an inquiry to Barclays over its chief executive’s links to Epstein.

“The FCA and PRA confirm there is an investigation concerning Mr Staley. We are unable to comment any further,” said the regulators.

Barclays said that its board had carried out its own review and “believes Staley has been sufficiently transparent with the company as regards the nature and extent of his relationship with Epstein”.

The bank added that Staley “retains the full confidence of the board” and would be unanimously recommended for re-election at Barclays’ annual general meeting.

Barclays said that Staley had volunteered “an explanation of his relationship with Epstein” to some of its executives in light of “renewed media interest” last summer.

“Staley also confirmed to the board that he has had no contact whatsoever with Epstein at any time since taking up his role as Barclays group chief executive in December 2015,” the bank said.

Relationship dating back to 2000

On today’s call with reporters, Staley said it was “very well known” that he had had a professional relationship with the disgraced financier dating back to 2000, when Staley took over as head of JP Morgan’s private bank, which counted Epstein as a client.

Staley said his relationship with Epstein began to “taper off” and became “much less frequent” after he left JP Morgan in 2015, before ending “totally” in late 2015.

The regulators’ investigation comes less than two years after Barclays became embroiled in a whistleblowing scandal that almost cost Staley his job.

Staley was fined £642,000 in 2018 for attempting to identify a whistleblower who sent letters criticising a Barclays employee. US regulators fined Barclays $15m (£11.5m) over the same incident.

Results overshadowed by probe

News of the investigation came as the bank reported a better-than-expected profit before tax of £6.2bn for 2019, as its investment bank reported bumper returns from fixed-income trading.

Its profit was nine per cent higher than in 2018 and above the £5.7bn average of analysts’ forecasts compiled by Barclays.

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

Barclays also announced a dividend of 9 pence for the year, compared with 6.5 pence for 2018, as its core capital ratio came in at a better-than-expected 13.8 per cent.

Barclays shares fell as much as 3.4 per cent in morning trading, but subsequently made up some ground and were just over 1.7 per cent down by lunchtime.

Skating on thin ice?

“Like Teflon: that’s one way to describe chief executive Jes Staley. Others may be less kind,” said Markets.com analyst Neil Wilson.

Wilson added that Staley could be skating on thin ice at Barclays, having avoided any major repercussions from the bank’s whistleblowing scandal, which saw Barclays fined £11.9m in 2018.

“Coming after the whistleblowing fine, it’s looking like the cat may be running out of lives. I wonder if he can survive this,” he said.

“Jes Staley has been ‘open’ and ‘transparent’ with the regulator, but the connection doesn’t help his reputation or Barclays,” said CMC Markets analyst David Madden.

“This morning it was confirmed that Mr Staley’s pay packet for the year jumped to £5.9 million from £3.36 million. The timing of the generous rise isn’t great in light of the Epstein story.”

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