REUTERS / Peter Nicholls
- Barclays says its CEO is under review by UK regulators for his relationship with Jeffrey Epstein.
- The board of directors initially relies on Staley and says the CEO is "sufficiently transparent to the company".
- "Like Teflon, that's how CEO Jes Staley can be described," said Neil Wilson of Markets.com. "Others may be less friendly."
- Visit Business Insider for more stories.
Barclays dropped a bomb on Thursday, saying the UK tax authorities are investigating CEO Jes Staley for his relationship with sex offender Jeffrey Epstein.
The UK Financial Regulator, together with the Prudential Regulation Authority, is reviewing "Mr. Staley's characterization for the company of his relationship with Mr. Epstein and the following description of that relationship in the company's response to the FCA". Barclays reported in a statement on Thursday the fourth quarter results.
As he was "sufficiently transparent to the company regarding the nature and scope of his relationship with Mr. Epstein," the bank said, "Mr. Staley retains the full trust of the Board of Directors."
"Like Teflon, that's how CEO Jes Staley can be described," said Neil Wilson of Markets.com. "Others may be less friendly."
Staley has wiggled before. In 2018 Staley was fined more than £ 600,000 ($ 778,000) from the same UK regulators after trying to expose a whistleblower at the bank in 2016.
"After the whistleblowing fine, it looks like the cat is going to die," said Wilson. "I wonder if he can survive that."
While "Staley has steered the ship through some troubled waters for European banks," Wilson said, the revenue missed the consensus targets. The bank, which has blamed macro-level uncertainty and low interest rates, has rejected its goal of returning more than 10% on tangible equity in 2020.
That "takes the shine," Wilson said, pushing the London trade stocks down 3%. "Cost reduction must go beyond cutting premiums."
Barclays said: "At the beginning of his career, Mr. Staley developed a professional relationship with Mr. Epstein," according to several media reports.
It went on:
"In the summer of 2019, given the media's renewed interest in the relationship, Mr. Staley volunteered and gave certain executives and the chairman an explanation of his relationship with Mr. Epstein. Mr. Staley also confirmed this to the board of directors that he has been CEO of the company since taking office Barclays Group never had any contact with Mr. Epstein in December 2015.
The relationship between Mr. Staley and Mr. Epstein was the subject of an investigation by the Financial Conduct Authority ("FCA") to which the company responded.
The Board will continue to fully cooperate with the regulatory investigation and may make further updates as necessary. "
(tagsToTranslate) Barclays (t) Jes Staley (t) Jeffrey Epstein (t) FCA