Barclays Plc (BCS) - Get Free Report shares were under pressure in early London trading after the bank said its CEO, Jes Staley, is being investigated by Britain's financial watchdogs over his relationship with the disgraced U.S. financier Jeffrey Epstein.
Both the Financial Conduct Authority and the Prudential Regulation Authority are looking into ties between Epstein, who died under mysterious circumstances in a New York prison last year while awaiting trial on sex trafficking charges, and Staley, who has lead Britain's second-largest bank since 2015. Barclays said Staley had no contact with Epstein since taking over as group CEO, and volunteered information regarding their relationship -- which allegedly began during Staley's tenure at JPMorgan's private banking division -- to company executives last year.
"As has been widely reported, earlier in his career Mr. Staley developed a professional relationship with Mr. Epstein. In the summer of 2019, in light of the renewed media interest in the relationship," the bank said in a statement, "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."
Barclays shares were marked 1.7% lower in early London trading following news of the FCA probe and changing hands at 176.2 pence each.
Staley told Bloomberg TV Thursday that he had a well-known and "longstanding professional relationship" with Epstein that dates back to the year 2000, but insisted he had been "transparent with the bank and with the board all along this process, and they have unanimously voted for me to be put up for re-election at the (annual general meeting later this year."
Staley's role with the bank was also tested in the spring of 2017, when he survived an attempt to oust him amid criticism of his handling of a whistleblower incident in the previous year.
Staley apologised for the incident, in which he attempt to discover the identity of an employee who wrote a letter to the bank's Board of Directors that questioned the hiring of a banker that had, at one point, worked with Staley.
The Barclays board concluded that Staley had "honestly, but mistakenly" believed he could identify the whistleblower, and the CEO was ultimately fined £642,000 by the Financial Conduct Authority and the Prudential Regulation Authority.