UK fines and bans Staley for misleading on Epstein
The UK financial watchdog has fined former Barclays CEO Jes Staley £1.8m and banned him from holding a senior management role due to "misleading statements" about his relationship with disgraced US financier Jeffrey Epstein.
The Financial Conduct Authority said on Thursday it had found that Staley "recklessly approved" a letter sent by Barclays to the FCA, which contained two misleading statements about the nature of his relationship with Epstein and the point of their last contact, and had acted with "a lack of integrity".
Barclays separately said the findings showed Staley had breached its conduct rules and he should be ineligible for or forfeit a number of awards amounting to £17.8m.
"We consider that he misled both the FCA and the Barclays board about the nature of his relationship with Mr Epstein," said Therese Chambers, joint executive director of enforcement and market oversight at the FCA.
"Mr Staley is an experienced industry professional and held a prominent position within financial services. It is right to prevent him from holding a senior position in the financial services industry if we cannot rely on him to act with integrity by disclosing uncomfortable truths about his close personal relationship with Mr Epstein," Chambers said in a statement.
Staley has appealed the decision. He will present his case to an upper tribunal, and the FCA said its decision is provisional.
Staley resigned as Barclays CEO in November 2021 after six years in charge following preliminary findings from an FCA investigation into how he described his links with Epstein.
Epstein was a US businessman who killed himself in August 2019 while awaiting trial on sex trafficking charges.
Staley has previously said he deeply regretted his past professional relationship with Epstein, which began in 2000 when Staley ran JP Morgan's private bank and Epstein was a client. It continued when Staley went on to run JP Morgan's investment bank.
The FCA said on Thursday it asked Barclays in August 2019 to explain what it had done to satisfy itself that there was no impropriety in the relationship between Staley and Epstein. In its response, Barclays relied on information supplied by Staley, who confirmed the letter was fair and accurate.
The letter claimed Staley did not have a close relationship with Epstein. But emails later disclosed showed Staley had described Epstein as one of his "deepest" and "most cherished" friends, the FCA said.
The letter from Barclays to the FCA also claimed Staley had ceased contact with Epstein well before he joined Barclays, but the FCA said Staley had been in contact with him in the days leading up to being appointed CEO in October 2015.
"While Mr Staley did not draft the letter there was no excuse for his failure to correct the misleading statements when he was the only person at Barclays who knew the full extent of his personal relationship with Mr Epstein and the specific timings of his contact with him. The FCA has found that Mr Staley was aware of the risk that his association with Mr Epstein posed to his career," the FCA said.
Barclays was not the subject to the FCA's investigation and said it cooperated fully.
It previously said it had suspended all of Staley's deferred bonus and long-term incentive plan awards pending the regulatory and legal proceedings against him, and now said he is ineligible for or has forfeited a number of awards, including his bonus for 2021 and his unvested LTIP awards that were still subject to performance conditions.