Barclays chief executive Jes Staley was today left fighting for his career after it emerged that City regulators were probing his relationship with sex offender Jeffrey Epstein.
While the bank gave him its wholehearted support and Staley declared he had been “fully transparent and open” over his dealings with the late financier, the City was left wondering if he could survive.
The Epstein affair follows Staley’s embarrassing blunders in ordering an investigation into a whistleblower in 2016 and a messy involvement in a dispute between private-equity giant KKR and his brother-in-law in 2017.
The Financial Conduct Authority and Prudential Regulation Authority first quizzed Barclays over its chief executive’s actions in the summer after reports in the US highlighted his long-standing relationship with Epstein as his private banker at JPMorgan.
Barclays investigated and found Epstein had been honest in his account that it was a previous business relationship that ended in 2015 before he became chief executive. It then passed on the results of its probe to the regulator.
However, it emerged today that, in December, the regulators had been unsatisfied with the response. It launched an inquiry into what Staley told the bank, and what the bank disclosed in its submission to them.
Barclays revealed that ongoing inquiry alongside strong annual results which beat City forecasts and suggested Staley’s turnaround of the company was bearing fruit.
However, the City appears split on whether delivering profits was enough to save his job.
Analyst Neil Wilson at markets.com said: “Anything relating to Epstein is toxic and this seriously calls into question Staley’s judgment. He’s got to go now as he risks tarnishing Barclays’ reputation as an age-old City institution.”
Others, however, stood by him, focusing instead on the bank’s financial performance.
Investec analyst Ian Gordon said: “He continues to confound the sceptics.” In an interview with the Evening Standard, Staley said: “I have been fully transparent and open. I worked with the guy professionally.”
Asked if he should not have cut off contact sooner, he replied: “I thought I knew him, but obviously I did not.”
A photo from 2011 that appeared in the New York Times shows Staley alongside former US Treasury Secretary Lawrence Summers, Epstein and Bill Gates. What happens next is not clear. On the face of the statement, there is a possible schism between Staley and his board.
It says that Staley “has been sufficiently transparent with the company as regards the nature and extent of his relationship” with Epstein, who committed suicide last August.
Boardroom sources said that they had always stood by Staley over the Epstein affair and would continue to do so.