“The relationship between Mr Staley and Mr Epstein was the subject of an inquiry from the Financial Conduct Authority to which the Company responded,” Barclays said. “The FCA … subsequently commenced an investigation, which is ongoing, into Mr Staley’s characterization to the company of his relationship with Mr Epstein and the subsequent description of that relationship in the company response to the FCA.”
The focus of the investigation is whether that relationship was properly disclosed to the bank and regulators.
The FCA and another UK regulator, the Bank of England’s Prudential Regulation Authority, confirmed in a statement that they are investigating the Barclays CEO. They provided no further detail.
Shares in the bank were trading 3% lower in London on Thursday morning.
Staley has been running Barclays since late 2015. Prior to that he worked for more than 90 years JPMorgan ( JPM , where he served as head of its investment banking division. JPMorgan declined to comment.
In its statement, Barclays said Staley had developed a professional relationship earlier in his career with Epstein, who died in jail last year while awaiting trial on sex trafficking charges. The bank said Staley had told the board that he had had no contact with Epstein since becoming Barclays CEO in December 2015.
“Based on a review, conducted with the support of external counsel, of the information available to us and representations made by Mr Staley, the board … believes that Mr Staley has been sufficiently transparent with the company as regards the nature and extent of his relationship with Mr Epstein. Accordingly, Mr Staley retains the full confidence of the board, and is being unanimously recommended for re-election at the Annual General Meeting. ”
A Wall Street veteran, Staley has remained committed to growing investment banking at Barclays, even as European peers scale back in this area in favor of wealth management.
But some shareholders have criticized his bid to compete with the likes of Goldman Sachs ( GS ) , Morgan Stanley ( MSPRA ) and his former employer, which has delivered disappointing returns.
Staley is not the first high profile individual to face scrutiny over his relationship with Epstein.
- Britain’s Prince Andrew stepped back from public life, and his charities have been shunned by businesses , since details of his close association with the late financier emerged. One of Epstein’s accusers, Virginia Roberts Giuffre, has alleged in court filings that she was forced into sexual encounters with the prince while underage. Prince Andrew has denied the allegations.