- Barclays on Thursday said UK regulators were investigating CEO Jes Staley's relationship with Jeffrey Epstein.
- Barclays said that the board was backing Staley and that the CEO had been "sufficiently transparent with the Company."
- "Like Teflon: that's one way to describe CEO Jes Staley," said Neil Wilson at Markets.com. "Others may be less kind."
- Visit Business Insider for more stories.
Barclays delivered a bombshell on Thursday, saying UK financial authorities were investigating CEO Jes Staley's relationship with the sex offender Jeffrey Epstein.
Britain's Financial Conduct Authority and the regulatory watchdog Prudential Regulation Authority are looking into "Mr. Staley's characterisation to the Company of his relationship with Mr. Epstein, and the subsequent description of that relationship in the Company's response to the FCA,"Barclays said on Thursday while reporting fourth-quarter earnings.
The bank said that because Staley had been "sufficiently transparent with the Company as regards the nature and extent of his relationship with Mr. Epstein," he "retains the full confidence of the Board."
'Like Teflon'
"Like Teflon: that's one way to describe CEO Jes Staley," said Neil Wilson at Markets.com. "Others may be less kind."
Staley has had wobbles before. In 2018, he was slapped with a fine of more than £600,000 by the same UK regulators following his attempts to unmask a whistleblower at the bank in 2016.
"Coming after the whistleblowing fine, it's looking like the cat may be running out of lives," Wilson said. "I wonder if he can survive this."
While Staley "has steered the ship through some choppy waters for European banking," Wilson said, revenue missed consensus targets. Blaming macro uncertainty and low interest rates, the bank backed down from its goal of a more than 10% return on tangible equity in 2020.
That "takes the shine off things," Wilson said, and pushed the shares 3% lower in trading in London on Thursday. "Cost-cutting needs to go beyond trimming bonuses."
Barclays said in its statement that "as has been widely reported, earlier in his career Mr. Staley developed a professional relationship with Mr. Epstein."
Business Insider reported in January that Epstein referred dozens of wealthy clients to Staley and that Staley even visited Epstein at his office in Palm Beach, Florida, after Epstein pleaded guilty in 2008 to soliciting a minor. A representative for Staley at Barclays declined to comment to Business Insider at the time.
The Barclays statement on Thursday continued:
"In the summer of 2019, in light of the renewed media interest in the relationship, Mr. Staley volunteered and gave to certain executives, and the Chairman, an explanation of his relationship with Mr. Epstein. Mr. Staley also confirmed to the Board that he has had no contact whatsoever with Mr. Epstein at any time since taking up his role as Barclays Group CEO in December 2015.
"The relationship between Mr. Staley and Mr. Epstein was the subject of an enquiry from the Financial Conduct Authority (FCA), to which the Company responded ...
"The Board will continue to cooperate fully with the regulatory investigation, and will provide a further update as and when it is appropriate to do so."
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