The Financial Conduct Authority (FCA), Britain’s financial regulator, has announced that it will fine former Barclays chief executive, James Staley, £1.8 million for “recklessly misleading” the watchdog regarding his relationship with disgraced financier Jeffrey Epstein. Epstein, who was awaiting trial on sex-trafficking charges, died by suicide in jail in 2019.
Barclays has also taken action in response to the FCA findings. The bank’s Remuneration Committee has determined that Staley should be ineligible for, or forfeit, bonuses and long-term incentives totaling £17.8 million ($21.89 million).
The FCA stated in a press release that Staley had approved a letter sent by Barclays to the regulator which contained two misleading statements about the nature of his relationship with Epstein and the extent of their last contact. Staley has appealed against the FCA’s findings to the Upper Tribunal, and therefore, the regulator’s findings are provisional for the time being.
The Bank of England has supported the FCA’s decision and emphasized the importance of senior managers acting with integrity and being open and cooperative with regulators.
The FCA had initially requested Staley in August 2019 to clarify what steps he had taken to ensure that there were no improprieties in his relationship with Epstein. In response, Barclays relied on information provided by Staley himself, with the chief executive confirming that the letter was fair and accurate. However, emails between Staley and Epstein revealed that Staley had described Epstein as one of his “deepest” and “most cherished” friends.
According to the FCA, a chief executive should exercise sound judgment and set an example for staff within their firm. The regulator concluded that Staley had failed to do so and had misled both the FCA and the Barclays Board about the nature of his relationship with Epstein.
Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, stated, “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.”
The FCA’s decision to fine Staley and Barclays’ decision to withhold bonuses and incentives reflect the importance of accountability in the financial sector and the need for transparency in dealings with regulators. The case serves as a reminder that senior managers must act with integrity and cooperate fully with regulatory bodies. The outcome of Staley’s appeal to the Upper Tribunal will determine the final resolution of this matter.
More detail via Reuters here… ( Image via Reuters )