The American chief executive officer of Barclays, Jes Staley, has stepped down with immediate effect as British regulators are investigating his relationship with disgraced financier Jeffrey Epstein. The bank said that C S Venkatakrishnan, who is commonly known as Venkat, will take over as CEO. Venkat was promoted last year to run the markets division of the bank. Earlier, he was chief risk officer at Barclays. However, the appointment is subject to regulatory approval. The bank and the outgoing CEO were made aware of the ‘preliminary conclusions’ of a probe by the Financial Conduct Authority (FCA) or the United Kingdom and the Bank of England’s Prudential Regulation Authority (PRA) recently. These preliminary findings are the result of two years of investigation into the matter. The investigation was launched in 2020. The bank also said that investigation was into how Staley had characterized his relationship with late Mr Jeffrey Epstein to the employees of Barclays. The regulators are also investigating how Barclays described that relationship in response to the FCA. However, the bank emphasized that there are no findings in the two-year-long investigation that Staley was aware of any of the alleged crimes of Mr Epstein. This was the main question that cemented Barclay’s stand to support its group chief executive when he was arrested in the summer of 2019.
“Keeping in mind those conclusions and Staley’s intention to contest them, the Board and Staley have reached an agreement that he will be stepping down from his role as Group Chief Executive as well director of Barclays with immediate effect,” the bank said. The development had its impact on the market as the shares of Barclays were trading 1.2 per cent lower after the announcement was made. Wealthy financier and convicted pedophile Epstein was arrested in July 2019. He was charged with sex trafficking by the United States federal prosecutors. However, he hanged himself a month later in a New York jail cell while awaiting trial. Barclays has maintained that the regulatory process still has to run its full course and therefore it will not be appropriate for the bank to make comments on the preliminary conclusions of the investigation. It is worth mentioning that Staley took over as CEO of the bank in October 2015. And Staley has previously said that his relationship with the convicted multimillionaire ended in late 2015. Staley has also said that ‘he regrets his relationship with Epstein.’ Before joining Barclays, Staley worked for more than three decades at JPMorgan. He served as head of JPMorgan’s investment banking division. He came in touch with Epstein in early 2000. At that time he was made head of JPMorgan’s private bank.
“He was already a client of the bank. I just tried to maintain the relationship during my time at JP Morgan. But that ended as soon as left JPMorgan,” Staley had said in February 2020. Staley has told the Barclays board that both were not in contact ever since he became CEO of the bank in December 2015. When asked to comment on the preliminary conclusions, a spokesperson for the FCA and PRA said that ‘regulators are not known for making comments on ongoing investigations or regulatory proceedings.’ There are reports that Staley has told the bank staff in an internal memo that he did not want them to be distracted from his ‘personal response’ to the investigations. “I will not be with all you of you for the next chapter of the banks’ story, but you all must know that I will be cheering your success from the sidelines,” Staley said. This is not the first time when the Wall Street veteran has run into trouble with the UK regulators. He was fined USD 870,000 by the FCA after it emerged that he had tried to identify a whistleblower at Barclays. He had tried to find out the person who had written an anonymous letter that raised concerns about the bank’s senior employee. He had apologized for that and admitted that ‘it was a mistake.’ The bank had clawed back around USD 680,000 from his 2016 pay over the incident.