The former Barclays chief executive Jes Staley has been banned from holding any senior City role and is set to miss out on nearly £18m in pay and bonuses after the UK’s financial watchdog ruled he had misled it over his relationship with Jeffrey Epstein.
The Financial Conduct Authority said it would also fine Staley £1.8m for failing to disclose the extent of his “close personal relationship” with the late sex offender.
The FCA said Staley had “recklessly approved” a letter from Barclays that mischaracterised how close the two men were, and how recently they had been in contact. It also found Staley was “aware of the risk” that his association with Epstein posed to his career.
Barclays said on Thursday that as a result of the regulator’s decision it would cancel at least £17.8m in bonuses and deferred pay awards that Staley was due to receive.
The FCA stressed its decision regarding the fine and ban was provisional, given that Staley had referred the decision to the regulator’s upper tribunal, where he will push the watchdog to reconsider. Barclays did not immediately confirm whether its pay decisions would be reversed if Staley succeeds in his legal challenge.
The FCA’s joint director of enforcement, Therese Chambers, said: “A CEO needs to exercise sound judgment and set an example to staff at their firm. Mr Staley failed to do this. We consider that he misled both the FCA and the Barclays board about the nature of his relationship with Mr Epstein.
“Mr Staley is an experienced industry professional and held a prominent position within financial services. It is right to prevent him from holding a senior position in the financial services industry if we cannot rely on him to act with integrity by disclosing uncomfortable truths about his close personal relationship with Mr Epstein.”
In a statement provided by his lawyers, Staley said: “If I had known who JE [Jeffrey Epstein] really was, there is absolutely no doubt that I wouldn’t be in the position I am in today. Prior to undertaking my former role, it was known that I had had a relationship with JE.”
“I have worked tirelessly over the last 43 years and have genuinely supported many people/social causes, where others might not have done so,” Staley added. “I am very disappointed by the FCA’s decision and I will continue to challenge it. I will not comment any further until these proceedings are concluded.”
In 2008, Epstein pleaded guilty to soliciting sex from girls as young as 14. The FCA has said that Staley continued contact with Epstein up to at least 2015.
The FCA’s provisional ruling centred on a letter that Barclays staff had written, and Staley had approved, after the regulator asked for details about his relationship with Epstein in August 2019.
However, the financial watchdog said it included two misleading statements. Firstly, while the letter claimed Staley did not have a close relationship with Epstein, an investigation found that, in emails between the two men, Staley described Epstein as one of his “deepest” and “most cherished” friends.
Secondly, it claimed Staley had ceased contact with Epstein long before he joined Barclays. However, the FCA said Staley stayed in contact with Epstein in the days leading up to the announcement that he was to take over as Barclays chief executive, in late October 2015. Staley joined Barclays two months later, in December.
While it acknowledged that Staley did not draft the letter, the FCA said there was “no excuse” for the fact he failed to correct the misleading statements, given he was the only person at Barclays who knew the full extent of his personal relationship with Epstein and how recently they had been in contact.
“The FCA has found that Mr Staley was aware of the risk that his association with Mr Epstein posed to his career,” the regulator’s notice said.
The Bank of England’s Prudential Regulation Authority said: “We support the FCA’s decision announced today against Jes Staley. It is imperative that senior managers act with integrity and are open and cooperative with the regulators.”
The FCA first began reviewing the characterisation of Staley’s ties to Epstein in 2020. Three years of investigatory work had been concluded by February this year, an FCA spokesperson said at that time. The law prevented it from making its decision public at that point.
After the FCA makes a decision such as this, it is then referred for review to the regulatory decisions committee, which operates separately, before any appeal at the upper tribunal. It is unclear why this process took more than seven months to complete.