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Businees | Dealbook: James Staley, Barclays C.E.O., Faces U.K. Probe on Jeffrey Epstein Ties

By Carlos Tejada and Amie Tsang

Business|James Staley, Barclays C.E.O., Faces U.K. Probe on Jeffrey Epstein Ties
The British bank said that financial authorities were looking into how its chief described his relationship with the disgraced financier, who killed himself while in jail on charges of sex trafficking.
Credit...Evan Agostini/Invision, via Associated Press
Barclays said on Thursday that British financial regulators were investigating the relationship between James E. Staley, its chief executive, and Jeffrey Epstein, the financier who killed himself last August after facing new allegations of sex trafficking of underage girls.
In a statement filed with the London Stock Exchange, the British bank said the Financial Conduct Authority and the Prudential Regulation Authority had begun an investigation into the relationship, which is ongoing.
“As has been widely reported, earlier in his career, Mr. Staley developed a professional relationship with Mr. Epstein,” the statement said. Barclays added that Mr. Staley, who is known as Jes, had told the bank that he had had no contact with Mr. Epstein after taking the top position at the lender in December 2015.
In its filing, Barclays said regulators were examining how Mr. Staley characterized the relationship with Mr. Epstein to the company, as well as what the company subsequently told the Financial Conduct Authority about it.
Barclays, the statement said, “believes that Mr. Staley has been sufficiently transparent with the company as regards the nature and extent of his relationship with Mr. Epstein.” It added that Mr. Staley retained the full confidence of the bank’s board.
The bank’s shares were trading about 2.6 percent lower on Thursday.
Mr. Staley had known Mr. Epstein since at least 1999, when the future Barclays chief was running the private banking business of the Wall Street bank JPMorgan. He was one of a handful of prominent Wall Street financiers linked to Mr. Epstein, who portrayed himself as indispensable to corporate executives and built up a small but powerful finance network.
Credit...New York State Sex Offender Registry, via Associated Press
The relationship was good enough that Mr. Staley visited Mr. Epstein about 10 years ago, while he was serving time in Florida for soliciting prostitution from a minor. The visit occurred at Mr. Epstein’s Palm Beach office, where he was allowed to serve part of his 13-month sentence. Over the years, Mr. Epstein referred dozens of wealthy clients to Mr. Staley and JPMorgan.
Among others, Mr. Epstein connected Mr. Staley with Glenn Dubin, who ran Highbridge Capital Management, a hedge fund in which JPMorgan bought a majority stake in 2004. The deal elevated the asset management division that Mr. Staley ran at JPMorgan into a major player in the hedge-fund world.
Mr. Epstein also listed Mr. Staley and JPMorgan as a references when he applied for a license to set up a bank. Mr. Staley’s spokesman said he was unaware of this at the time.
Mr. Staley was named C.E.O. of Barclays in 2015, becoming the fifth chief executive in about seven years at a bank that had suffered from regulatory troubles and involvement in the Libor-rigging scandal.
He has reshaped the bank, cutting costs and bolstering the company’s commitment to investment banking. But his tenure has also been marked by a series of questions over his judgment.
In 2016, he tried to unmask a whistle-blower who had criticized one of his senior hires. That led to a fine of $15 million from New York’s banking regulator, which said that it had uncovered “shortcomings in governance, controls and corporate culture” at the bank. British bank regulators also fined Mr. Staley about $1.5 million and required the bank to submit reports on parts of its whistle-blowing program.
Mr. Staley has also fallen for an email from a prankster who posed as the chairman of Barclays, and he upset a big client, Kohlberg Kravis Roberts, after trying to help his brother-in-law’s business interests. Those stumbles have spurred some shareholders to demand his resignation along the way.
In August, Mr. Epstein killed himself while in a Manhattan jail, where he was being held awaiting trial on federal sex trafficking and conspiracy charges. He had been charged by Manhattan prosecutors in July with sexually exploiting dozens of women and girls in New York and Florida.
Those accusations involved actions up to 2005. A lawsuit filed last month by Denise N. George, the attorney general of the Virgin Islands, cited further evidence that Mr. Epstein had sexually abused and trafficked hundreds of young women and girls on his private Caribbean island, some as recently as 2018.


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