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Barclays CEO probed over Jeffrey Epstein links

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK

British financial regulators are investigating Barclays (BARC.L) chief executive Jes Staley over his relationship with Jeffrey Epstein, the disgraced former financier who died by suicide last year while under arrest on sex trafficking charges.

Barclays said in a statement on Thursday the UK’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) were investigating Staley over the “characterisation” of his relationship with Epstein.

The New York Times first reported on Staley’s relationship with Epstein last July. An article stated Staley visited Epstein while he was serving time for soliciting prostitution from a minor and suggested the pair had a close business relationship over many years.

Barclays said the FCA and PRA were investigating Jes Staley over his 'characterisation' of his relationship with Epstein. (Evan Agostini/Invision/AP)

Regulators asked questions about Staley’s links to Epstein in the wake of the report and launched a full probe last December. It had not been disclosed until this week.

The investigation centres around “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.

“I feel very confident I have been very transparent,” Staley told journalists on Thursday.

“The FCA and PRA confirm there is an investigation concerning Mr Staley,” the agencies said in a statement provided to Yahoo Finance UK. “We are unable to comment any further.”

‘I thought I knew him well’

Staley said his relationship with Epstein dated back to 2000 when he took over JP Morgan’s private bank.

“He was a client when I joined the private bank,” Staley told journalists. “The relationship was maintained during my time at JP Morgan but as I left [JP] Morgan the relationship tapered off significantly.”

Epstein was in New York financial services, working at investment bank Bear Sterns before starting his own firm.

“Obviously I thought I knew him well,” Staley told journalists. “I didn’t. For sure, with hindsight of what we all know now, I deeply regret having had any relationship with Jeffrey Epstein.”

Jeffrey Epstein. (New York State Sex Offender Registry via AP, File)

Epstein died by suicide last year while under arrest facing charges of underage sex trafficking. He had previously reached a plea deal in Florida on charges of procuring an underage girl for prostitution and soliciting a prostitute.

Epstein’s arrest and subsequent death sparked a global scandal due to his extensive contact with high-profile figures, including Microsoft chief executive Bill Gates and Prince Andrew. Epstein’s ‘little black book’ was renowned.

Barclays said it had investigated Staley’s relationship with Epstein and concluded the chief executive had only “a professional relationship with Mr. Epstein” early in his career. Staley 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.

Read more: Barclays surprises with better-than-expected results

Staley has “the full confidence of the Board, and is being unanimously recommended for re-election at the Annual General Meeting,” Barclays added.

“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.”

The Epstein probe is the second investigation by UK regulators into Staley in recent years. Staley was fined £642,430 ($832,939) by the FCA and PRA in 2018 for attempting to unmask a whistleblower at the bank.

Barclays’s disclosure of the Staley investigation came alongside better-than-expected full-year results.