Barclays CEO Jes Staley is stepping down after an investigation into his relationship with convicted sex offender Jeffrey Epstein. CNBC’s Geoff Cutmore reports. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
Barclays CEO Jes Staley will stand down following an investigation into his relationship with Jeffrey Epstein, the bank said in a statement Monday.
C.S. Venkatakrishnan (known as Venkat) will take over as chief executive with immediate effect, subject to regulatory approval.
Barclays and Staley “were made aware on Friday evening of the preliminary conclusions” of a probe by the U.K.’s Financial Conduct Authority and the Prudential Regulation Authority, Barclays said.
It added that the investigation was into “Mr Staley’s characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays’ response to the FCA.”
“In view of those conclusions, and Mr Staley’s intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays,” the bank said.
Shares of Barclays were trading 1.2% lower Monday morning after the announcement.
The bank said the investigation “makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.”
Wealthy financier Epstein was arrested in July 2019 on child sex trafficking charges but hanged himself a month later in a Manhattan federal jail.
Whistleblower scandal
Staley’s links to the dead financier have been the subject of an investigation by the U.K.’s financial watchdog and the Bank of England’s regulatory authority. Barclays said the “regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions” of the investigation.
Staley became CEO of Barclays in October 2015. He has previously said his relationship with Epstein, which he regrets, ended in late 2015, Reuters reported.
The news agency also said Monday that Staley told staff in an internal memo, seen by Reuters, that he did not want his “personal response” to the investigations to be a distraction.
“Although I will not be with you for the next chapter of Barclays’ story, know that I will be cheering your success from the sidelines,” he said, according to Reuters.
Fahed Kunwar, an equity analyst at Redburn, told CNBC on Monday that detail was still lacking around the financial regulators’ probe. He pointed out that Staley had a somewhat difficult relationship with Britain’s financial regulators who fined him in 2018 for trying to identify a whistleblower who sent letters criticizing a Barclays employee.
“Clearly we need to see what the review says. But I think this adds to the widening picture of his relationship with the regulators being difficult and I think that is why he has stepped down so quickly today,” Kunwar told CNBC’s “Squawk Box Europe,” describing Staley’s departure as a shock for investors nonetheless.
“In the last couple of years, the investment bank has had such a solid performance I think Mr Staley’s position had become quite entrenched and so investors had really changed their mind on him and liked the direction of travel of Barclays,” he added.
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