London For a long time it looked as if Jes Staley could sit out the Epstein scandal. But now the Barclays boss has been overtaken by his relationship with the late sex offender Jeffrey Epstein. The chief executive is resigning with immediate effect, announced the major British bank on Monday.
On Friday evening, the British regulators FCA and PRA announced the preliminary results of their Epstein investigation to the bank. The two authorities did not comment on the content, but Staley was apparently no longer tenable. It was agreed to resign because Staley wanted to contest the result, the bank said.
But while Staley reported brilliant results, the Epstein investigation continued in the background. The guards checked whether the bank manager had correctly presented his relationship with the offender to the bank and the supervisory authorities.
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The Barclays boss had always emphasized that he only had a professional relationship with Epstein. But emails sent to London by the US authorities in 2019 apparently suggest that the relationship went beyond that.
More than a professional relationship?
The two men met in New York in 2000 when Staley was working for the US bank JP Morgan. The private banker looked after the wealthy clients of the New York investor. The contact also continued when Epstein was sentenced to imprisonment in 2008 for sexually abusing a 14-year-old girl.
Seven years later, Staley sailed with his yacht “Bequia” to Epstein’s private island Little St. James in the Caribbean. At that time, Epstein ran a sex trafficking ring with minors. The full extent did not become apparent until years later when the FBI arrested Epstein in the summer of 2019.
The prisoner on remand was soon found dead in his cell, the official declaration was suicide. In the course of the investigation, numerous celebrities were targeted by the authorities, in Great Britain, for example, Prince Andrew was released from his royal duties.
Already in 2020 under pressure to explain
The FCA and the PRA began their investigation against Staley in December 2019. When Barclays announced this in February 2020 on the occasion of the quarterly figures, the bank boss came under considerable pressure to explain. At the time, he assured journalists that after leaving JP Morgan he had only had occasional contact with Epstein.
He had his last contact in the second half of 2015 – shortly before he took office at Barclays. Staley said he had disclosed all of this to the bank. Reports that he knew Epstein well were not true. He now regrets very much that he had a connection with Epstein. At that time, the bank’s board of directors stood behind the chief executive officer and expressed “full confidence” in him.
Less than two years later, the FCA and PRA have apparently come to the conclusion that Staley’s presentation to the bank and the regulator was not entirely complete. The authorities did not officially comment on this.
Barclays rushed to point out that the issue was not that Staley was in any way implicated in Epstein’s crimes. “It should be noted that the investigation does not conclude that Staley saw or was aware of the alleged crimes of Epstein,” the bank said. This was the central point why the bank supported Staley after Epstein’s arrest in 2019.
Barclays has long supported Staley
However, incomplete information to the supervisory authority in banking circles is a serious matter. Even the slightest doubt as to whether a person is personally and professionally qualified to run a bank can lead to failure.
Barclays had long supported Staley, although he had previously attracted attention through questionable crackdown on a whistleblower. The bank boss was controversial for a while, but in the end he seemed more firmly in the saddle given the good numbers.
Staley’s successor started work on Monday. He is the previous head of global trading, CS Venkatakrishnan, also known as “Venkat” by the staff. Like Staley, he was with JP Morgan for more than twenty years before joining Barclays as Chief Risk Officer in 2016.
“Venkat” was selected as the preferred successor candidate for Staley a year ago, the bank announced. That’s why he was promoted to head of trading.
In fact, considerations about the handover have been going on for a long time: The “Financial Times” had already reported that Staley wanted to stop in 2021 and that the search for a successor was ongoing. Nobody had imagined Staley’s departure to be that abrupt, however.
More: Barclays boss connection to sex offender Epstein overshadows good numbers