The FCA has banned Jes Staley from holding senior positions in the City of London. He is appealing this decision. Photo: Gina Moon/Bloomberg
In the weeks before he was forced to resign, Barclays chief executive Jes Staley showed no outward signs that he was worried that his thriving four-decade banking career was about to end. -it's about to collapse.
Despite an ongoing investigation into his ties to the late pedophile financier Jeffrey Epstein, Staley attended the city's annual dinner less than six weeks before his defenestration.
Attendees at the late September 2021 gala — mostly senior city leaders — interacted with ministers and regulators and heard from the heads of two of the city's most powerful regulators: the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). ).
When Square Mile's top brass reconvene next week for this year's town dinner, Staley's spectacular failure will add spice to the menu.
In the two years since one of his last public appearances as head of Barclays, the brilliant American's career and reputation have suffered a serious blow.
After he was forced to leave Barclays in November 2021, a flood of unsealed documents in two New York court cases revealed a raft of new and detailed allegations about Staley's «deep» friendship with Epstein.
He was also sued by his former employer JP Morgan.
The 66-year-old now faces the greatest humiliation for a banker in the UK: a ban from the City of London.
Combined with the £1.8 million fine, Staley will also forfeit nearly £18 million in deferred salary from Barclays, cementing his fall from grace.
Staley is appealing the FCA's decision to an independent tribunal and said he was «disappointed» with its decision.
The relationship between the two men began more than two decades ago, when Staley ran the private bank JP Morgan, of which Epstein was a key client. Staley took over in 1999, and they allegedly first met in 2000.
In 2008, Epstein was found guilty of soliciting a child for prostitution and sentenced to 18 months in prison. However, the verdict did not appear to harm the couple's relationship, as Staley visited Epstein while the convicted pedophile was serving his sentence.
When Staley left JP Morgan in 2013, the Wall Street giant dropped Epstein as a client within months.
Staley was chief executive of Barclays for four years before concerns arose about his links to Epstein. In February 2020, following media reports, Barclays was forced to reveal that Staley was being investigated by City regulators over how he described his relationship with a convicted pedophile to the bank.
The Barclays board lined up behind him and said: “The board believes that Mr Staley has been sufficiently transparent with the company about the nature and extent of his relationship with Mr Epstein.
“Accordingly, Mr Staley has the full confidence of the board and is unanimously recommended for re-election at the annual general meeting.”
This position was maintained for almost two years before the FCA and The PRA made a decision The bank's board was aware of the draft findings of the investigation, which led to Staley's resignation.
On Thursday, after another nearly two-year wait, the FCA finally released full details of its investigation into Staley and handed down its punishment.
The case against the American banker centered on two misleading statements that regulators said Staley had approved about his relationship with Epstein. The first is about the closeness of the relationship, and the second is about the frequency of contacts with Epstein.
Jes Staley centers on his relationship with pedophile financier Jeffrey Epstein (pictured). FCA ruling. Photo: AP, File
The 79-page decision notice states that on August 15, 2019, the FCA asked Barclays to explain what it did to ensure there was no wrongdoing in the relationship between Staley and Epstein.
The notice stated: “In its response, Barclays relied on information provided by Mr Staley. Mr Staley confirmed that the letter was honest and accurate. In fact, in emails between the two, Staley described Epstein as one of his «closest» and «dearest» friends.»
The email sent by Barclays also stated that Staley had cut off contact with Epstein long ago before he joined Barclays, but between July and October 2015, when he was appointed, the pair had numerous discussions about Barclays' approach, the notice said. In one email, Staley said the matter was «very confidential.»
The regulator said the inconsistencies resulted in Staley «recklessly misleading the FCA», adding that it demonstrated a «lack of integrity».
Between January 2013 and October 2015, the pair exchanged almost 600 emails, some of which bordered on the bizarre.
In an email titled “Friendship” in October 2015, Staley wrote: “Over the past three years, your friendship has never wavered. It means a lot to me too. […] Cross your fingers!!!”
Another message from Staley in January 2015 said: “The strength of the Greek army was that its core stood shoulder to shoulder and did not run or break, no. the meaning of the threat. This is us.”
Staley told the FCA he had sought “advice” from “a couple of people” about negotiations with Barclays, adding that his conversations with Epstein “reflect how he writes to business contacts.” .
Moreover, this was not the first time that the regulator had investigated his activities. In 2018, the regulator fined him for attempting to expose a whistleblower. At the time, the regulator said Staley failed to act with due competence, care and diligence when he directed his security team to determine the source of personal allegations made against a colleague in 2016.
The FCA's decision comes amid a difficult year for Staley. In two lawsuits against JP Morgan in New York involving client relationships with Epstein, a cache of unsealed documents revealed just how close the two men were.
Emails revealed that Jes Staley allegedly stayed on Epstein's private island, Little St. James, while its owner was away under house arrest. Credit : REUTERS/Marco Bello
The emails revealed that the ousted Barclays boss allegedly stayed on Epstein's private island, relaxing in a hot tub and drinking white wine while the pedophile financier was under house arrest for soliciting a minor for prostitution.
The emails revealed -well Epstein, Mr. Staley allegedly said: “I’m currently in the hot tub with a glass of white wine. This is an amazing place. Next time we'll be here together. I owe you a lot. And I deeply value our friendship. I don’t have many that are as deep.”
Staley was also accused of witnessing the abuse of young women by Epstein in one of the trials.
Staley's lawyer previously said: «We want to make clear that our client was not involved in any of the alleged crimes committed by Mr. Epstein.»
FCA decision to ban Staley — making him the first chief executive of a major UK lender to suffer such a fate is a significant moment in Nikhil Rathi's tenure as head of the FCA.
One city analyst says the FCA's decision underscores the regulator's increasing commitment to tackling non-financial abuses.
«It's definitely something they've shown a lot more interest in,» he says.
Staley will now work with his legal team, which includes lead City lawyer Kathleen Harris, in an attempt to appeal the decision against him to the regulator's higher court.
But for now, his fall from grace appears to have been as brutal as it was swift. For Staley, the specter of Epstein is now more threatening than ever.
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