Barclays chief under investigation in UK for ties to Epstein

Barclays's board defended CEO Jes Staley, who has said he regretted his relationship with alleged sex offender Epstein.

    US financier Jeffrey Epstein died in August 2019 while in prison under sex trafficking charges [File: Handout via Reuters]
    US financier Jeffrey Epstein died in August 2019 while in prison under sex trafficking charges [File: Handout via Reuters]

    The United Kingdom's financial regulators are investigating past links between Barclays Chief Executive Jes Staley and the United States financier Jeffrey Epstein, who killed himself while awaiting trial on sex trafficking charges, the bank said on Thursday.

    Barclays said its board had looked into media reports on Staley's relationship with Epstein, and investigated Staley's characterisation of it. The Financial Conduct Authority and the Prudential Regulation Authority are investigating.

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    The bank said its board believes Staley has been sufficiently transparent about his ties to Epstein, whom Staley said he had not seen since taking over as Barclays chief executive in 2015.

    Speaking to reporters on Thursday, Staley said he regretted his relationship with Epstein, which began in 2000 while he was employed by JPMorgan and "tapered off significantly" after he left the Wall Street lender.

    The relationship ended in late 2015, Staley said.

    "I thought I knew him well, and I didn't. I'm sure with hindsight of what we all know now, I deeply regret having had any relationship with Jeffrey Epstein," he said.

    The New York Times last year said Epstein had referred "dozens" of wealthy clients to Staley when the chief executive ran JPMorgan's private banking business.

    It also reported that Staley visited Epstein in prison when he was serving a sentence between 2008-09 for soliciting prostitution.

    Staley also went to Epstein's private island in 2015, Bloomberg reported.

    Barclays has previously said Staley never engaged or paid fees to Epstein to advise him or provide professional services.

    The probe is the second regulatory investigation into Staley's conduct in recent years, after the FCA and PRA fined him 642,000 pounds ($832,803) in 2018 for trying to identify a whistle-blower who sent letters criticizing a Barclays employee.

    Barclays shares fell 3.4 percent on Thursday morning.

    Staley received a bumper pay package of 5.9 million pounds ($7.65m) in 2019, up from 3.36 million pounds ($4.36m) a year earlier. The sum was boosted by the paying out of a long-term incentive plan worth 1.48 million pounds ($1.92m).

    His bonus also rose to 1.65 million pounds ($2.14m), reflecting the bank's strong annual performance.

    Both Staley and Finance Director Tushar Morzaria took cuts to their pension allowances in 2019, and will now receive fixed cash contributions equating to 10 percent of salary in line with the broader workforce.

    Lower-paid employees will see their employer pension contributions rise to 12 percent.

    The bank, meanwhile, reported a better-than-expected profit before tax of 6.2 billion pounds ($8.04bn) for 2019, as its investment bank reported bumper returns from fixed-income trading.

    Its profit was 9 percent higher than in 2018 and above the 5.7 billion pound ($7.39bn) average of analysts' forecasts compiled by the bank.

    The UK lender also reiterated its ambition of achieving a 10 percent return on equity this year, although it repeated a warning from October that the worsening economic outlook might make reaching that target difficult.

    Staley has said Barclays's mix of investment and retail banking businesses should partly insulate it from economic and market fluctuations.

    Barclays paid a dividend of nine pence ($0.12) for the year, compared with 6.5 pence ($0.08) for 2018, as its core capital ratio came in at a better-than-expected 13.8 percent.

    SOURCE: Reuters news agency