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Why Barclays CEO Jes Staley stepped down over Jeffrey Epstein investigation

Cache of emails between the two men prompted probe by UK regulators

The chief executive of Barclays has quit following a probe into his links with late convicted sex offender Jeffrey Epstein.

News of Jes Staley’s resignation was “sending shockwaves through the city”, said the BBC’s Dharshini David this morning, as the bank’s share price dropped.

The investigation by the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) “has been a consistent distraction for the banker and for Barclays since it was launched” in February 2020, said the Financial Times.

The probe began after a cache of old emails between the two men was sent from US regulators to their UK counterparts. The communications “suggested their relationship was friendlier than claimed by Staley, who had categorised the association as professional”, the newspaper added.

Staley told reporters last year that their working relationship dated back to 2000, when he was asked to run JPMorgan’s private bank and Epstein was a client. But he said that it had “tapered off quite significantly” once he left JPMorgan and joined Barclays in 2015. 

According to The Telegraph, Staley “called in at Epstein's private Caribbean island for a four-hour lunch” while on a sailing holiday on his yacht “just months before taking the top job at Barclays”. Staley also reportedly visited Epstein in Florida in 2009, while the billionaire financier was serving a 13-month sentence but was out on work release after being convicted the previous year of soliciting prostitution from a minor.

Staley said in February last year that “obviously I thought I knew him well and I didn’t”. The bank boss added that “with hindsight of what we all know now, I deeply regret having had any relationship with Epstein”, who killed himself in a New York prison cell in August 2019 while awaiting trial for charges of sex-trafficking underage girls.

In a statement today, Barclays said its board was “disappointed” by the outcome of the investigation and praised Staley’s leadership. “It should be noted that 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,” added the bank.

Staley, who will get a £2.5m farewell, intends to contest the conclusions of the regulators. The US banker will also be eligible to receive repatriation costs to the US, said City A.M.

Sky News said Staley “told Barclays staff in an email that he had quit as he did not want his personal response to the findings to be a distraction”.

He will be replaced by C.S. Venkatakrishnan, the bank’s head of global markets.

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