Epstein case: Barclays boss resigns with immediate effect

Posted on Nov 1, 2021, 3:12 p.m.

The Epstein sex scandal once again shakes the financial elite. After the founder of Apollo, world number two in private equity, the boss of Barclays is in turn forced to resign because of his past relationship with the former millionaire trader, indicted for having created a vast network of prostitution of underage girls.

Barclays and its leader “learned on Friday evening of the preliminary findings of the FCA and PRA investigation,” British financial regulators, into the character of the relationship between Jes Staley and Jeffrey Epstein, the bank said in a statement . “Given these findings and Jes Staley’s intention to challenge them, the board and Jes Staley have agreed to leave his role as CEO,” she said.

In an internal email, the man explained that he was leaving to prevent his personal defense from “distracting” the bank. The announcement dropped its price by nearly 4% at the opening.

New management at the head of Barclays

Passed by the biggest institutions of the place, and considered as a potential successor to the all-powerful boss of JP Morgan, before being called by Barclays in full turmoil in 2015, the American financier had just seen the upper hand on his staunchest critic, activist Edward Bramson after a three-year campaign. After major restructuring, Barclays had achieved a complete turnaround, with a doubling of its profits in the third quarter to 2 billion pounds before tax, and a record 6.9 billion pounds in nine months. Having become the most offensive European bank on the other side of the Atlantic, it benefited from the acquisition of parts of Lehman Brothers after the financial crisis, the United States generating half of its income.

CS Venkatakrishnan, who was appointed to take over on Monday, was his boss in the world of market activities and director of risks until last year. The latter told investors that he would remain aligned with the current strategy, which is “the right one”, but that he will announce the next changes in the organization of the investment bank, according to the British press.

Jes Staley will continue to receive his salary, of £ 2.4million and other allowances, until October 2022, Barclays said, but made no mention of a bonus. He had halved his variable in 2020, to 843,000 pounds.

This is the second time that British supervisors have investigated the leader. In 2018, he had already paid 1.1 million pounds for forcing to identify a Barclays whistleblower.

This procedure, launched at the end of 2019, concerns his relations as a former executive of JP Morgan, of which Jeffrey Epstein was a client. It was the American bank that provided investigators with emails exchanged between the two men when Jes Staley took over as head of his private bank in 1999.

The “professional” relationship between Jes Staley and Jeffrey Epstein had been initiated around this time. According to the “New York Times”, the latter had referred dozens of high net worth clients to him when he was running the private bank.

“Sufficiently transparent”

The American daily also reported that Jes Staley visited Jeffrey Epstein in prison for the first acts of prostitution dating from 2008-2009. The financier also visited his private island in 2015, according to Bloomberg, before Jeffrey Epstein was jailed in 2019 for child trafficking and committed suicide.

The financier had said his contact with the man accused of child sex trafficking ended in 2015, before he was appointed head of Barclays. “I thought I knew him well but I didn’t. Of course, looking back from what we know now, I deeply regret having had any relationship with Jeffrey, ”Jes Staley said in 2020.

“There is nothing in the investigation to establish that Jes Staley witnessed or had knowledge of the alleged crimes of Jeffrey Epstein, a central issue underlying the bank’s support for Jes Staley when Jeffrey Epstein was arrested at the summer 2019, ”Barclays said in its press release on Monday.

The bank’s board of directors had in February 2020 “unanimously” recommended his re-election to the general meeting in May, considering that he had been “sufficiently transparent”.

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