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Barclays CEO Jes Staley quits after Jeffrey Epstein probe

Barclays CEO Jes Staley quits after Jeffrey Epstein probe

01 Nov 2021

Jes Staley, CEO, Barclays Plc

Christopher Goodney | Bloomberg | Getty Images

LONDON — Barclays CEO Jes Staley will stand down following an investigation into his relationship with Jeffrey Epstein, the bank said in a statement Monday.

C.S. Venkatakrishnan (known as Venkat) will take over as chief executive with immediate effect, subject to regulatory approval.

Barclays and Staley “were made aware on Friday evening of the preliminary conclusions” of a probe by the U.K.’s Financial Conduct Authority and the Prudential Regulation Authority, Barclays said.

It added that the investigation was into “Mr Staley’s characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays’ response to the FCA.”

“In view of those conclusions, and Mr Staley’s intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays,” the bank said.

Shares of Barclays were trading 1.2% lower Monday morning after the announcement.

The bank said the investigation “makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.”

Wealthy financier Epstein was arrested in July 2019 on child sex trafficking charges but hanged himself a month later in a Manhattan federal jail.

Whistleblower scandal

Staley’s links to the dead financier have been the subject of an investigation by the U.K.’s financial watchdog and the Bank of England’s regulatory authority. Barclays said the “regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions” of the investigation.

Staley became CEO of Barclays in October 2015. He has previously said his relationship with Epstein, which he regrets, ended in late 2015, Reuters reported.

The news agency also said Monday that Staley told staff in an internal memo, seen by Reuters, that he did not want his “personal response” to the investigations to be a distraction.

“Although I will not be with you for the next chapter of Barclays’ story, know that I will be cheering your success from the sidelines,” he said, according to Reuters.

Fahed Kunwar, an equity analyst at Redburn, told CNBC on Monday that detail was still lacking around the financial regulators’ probe. He pointed out that Staley had a somewhat difficult relationship with Britain’s financial regulators who fined him in 2018 for trying to identify a whistleblower who sent letters criticizing a Barclays employee.

“Clearly we need to see what the review says. But I think this adds to the widening picture of his relationship with the regulators being difficult and I think that is why he has stepped down so quickly today,” Kunwar told CNBC’s “Squawk Box Europe,” describing Staley’s departure as a shock for investors nonetheless.

“In the last couple of years, the investment bank has had such a solid performance I think Mr Staley’s position had become quite entrenched and so investors had really changed their mind on him and liked the direction of travel of Barclays,” he added.

Venkat as CEO

Regarding the appointment of Venkat, Barclays said its board “has had succession planning in hand for some time, including reviewing potential external appointees, and identified Venkat as its preferred candidate for this role over a year ago, as a result of which he moved from the position of Group Chief Risk Officer to Head of Global Markets.”

Barclays said it was confident that under his leadership, the bank “will continue its strategic direction and improve performance in line with the progress of recent years.”

Before joining Barclays in 2016, Venkat worked at JPMorgan Chase from 1994, holding senior roles in asset management and investment banking.

Epstein’s contacts

Any former association with Epstein is now proving toxic for a variety of high-profile people.

Epstein’s close associate and former girlfriend, British socialite Ghislaine Maxwell, is herself awaiting trial on charges that she recruited underage girls to be sexually abused by Epstein. She denies the charges.

One of Epstein’s accusers, Virginia Giuffre, has claimed that Prince Andrew of Britain, the Duke of York, had sex with her when she was underage and in the clutches of Epstein and Maxwell. The prince denies the allegations.

Epstein is also known to have socialized with former U.S. Presidents Donald Trump and Bill Clinton, both of whom have sought to distance themselves from Epstein, insisting they knew nothing of his crimes.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, commented on Monday that “‘the repercussions from the Jeffrey Epstein scandal stretch far and wide, and now Barclays finds itself at the centre of the storm.”

“While the probe did not centre on Mr Staley’s role at Barclays but what he disclosed about his previous position at JP Morgan, what was under question was how he characterised his former relationship with the disgraced financier,” she said in a note.

“It’s understood Mr Staley will contest the conclusions, and clearly the board want to distance Barclays from what could be a long drawn out process.”

Correction: This story has been updated to accurately describe Jeffrey Epstein’s accrued wealth.