Ex-Barclays CEO Jes Staley fined and banned by UK regulator for Epstein ties

The UK’s Financial Conduct Authority fined former Barclays CEO Jes Staley and banned him from holding a senior management role in the financial-services industry, saying he "recklessly misled" the regulator about his relationship with Jefferey Epstein.

"A CEO needs to exercise sound judgement and set an example to staff at their firm," Therese Chambers, the FCA's joint executive director of enforcement and market oversight, said in a statement Thursday. "Mr Staley failed to do this."

The fine, FCA said, would amount to 1.8 million pounds ($2.2 million) and Staley would be barred from "holding a senior management or significant influence function in the financial services industry."

Staley, who resigned from the British bank in 2021 because of the FCA's probe, is appealing the findings at a tribunal.

Barclays released a regulatory filing Thursday stating that a board committee concluded Staley should forfeit £17.8m ($22 million) in past awards, including his 2021 bonus and other unvested deferred bonus awards.

Barclays stock (BCS) fell 4.5% in the first 30 minutes of Thursday trading. Year to date it is up 4.2%.

The announcement comes roughly two weeks after Staley reached a separate confidential settlement with JPMorgan Chase (JPM), which had sued Staley over his personal relationship with Epstein.

Staley was a top executive at JPMorgan before leaving in 2013, the year JPMorgan dismissed Epstein as a client. JPMorgan claimed Staley misled executives about Epstein, an assertion that was denied by Staley's lawyers.

JPMorgan has separately paid $365 million this year to settle lawsuits relating to its relationship with Epstein, including a class-action lawsuit filed by the anonymous victims of Jefferey Epstein and another suit from the government of the US Virgin Islands.

Earlier this year, Deutsche Bank also agreed to pay $75 million to settle a lawsuit with Epstein's victims. The bank took Epstein as a client in 2013 after JPMorgan tossed him out.

'A lack of integrity'

The new actions against Staley announced Thursday result from a 2019 letter sent by Barclays to the FCA that the regulator said "contained two misleading statements" about the nature of Staley's relationship with Epstein and their last point of contact.

Epstein, who pleaded guilty in 2008 to soliciting a minor for prostitution, was arrested in 2019 on child sex trafficking charges. He was later found dead in August of that year in prison in an apparent suicide.

The same month, the FCA asked Barclays to address Staley’s relationship with Epstein. Barclays' response on Oct. 8, 2019 claimed that Staley did not have a close relationship with Epstein and that he had ceased contact with Epstein well before he joined Barclays in 2015.

The regulator Thursday said the letter didn't accurately reflect facts known to Staley at the time he approved that letter.

For example, the FCA said the two men had exchanged more than 1,100 emails between July 2008 and December 2012, with Staley describing Epstein as one of his "deepest" or "most cherished" friends. These e-mails, according to the FCA, showed they continued to communicate between January 2013 and October 2015, exchanging almost 600 e-mails during that period.

The FCA said Staley disclosed to Epstein details of discussions he had with Barclays that led to his appointment as CEO, including the approval of his appointment by Barclays' nominating board on Oct. 8, 2015.

The FCA also said Staley visited Epstein's properties, including his island located in the US Virgin Islands, on three occasions, most recently in April 2015.

"While Mr Staley did not draft the letter there was no excuse for his failure to correct the misleading statements when he was the only person at Barclays who knew the full extent of his personal relationship with Mr Epstein and the specific timings of his contact with him," the FCA said.

As a result, "Mr. Staley recklessly misled the FCA and acted with a lack of integrity."

David Hollerith is a senior reporter for Yahoo Finance covering banking and crypto.

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