Jes Staley banned and fined
The business news that matters
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Jes Staley, the former chief executive of Barclays, has been fined £1.8 million and banned from management positions in the financial services industry for misleading the Financial Conduct Authority and the board of Barclays about his links to Jeffery Epstein, the convicted sex offender.
The FCA, the City regulator, said in an announcement this morning that an investigation had found Staley “recklessly misled the FCA and acted with a lack of integrity”.
Staley has appealed the decision and there will now be a hearing at the Upper Tribunal, which is independent of the FCA. This means the fine and ban are provisional. Staley stood down as boss of Barclays in late 2021 to challenge the allegations about his links to Epstein
The proposed penalty by the FCA is one of the most significant the City regulator has ever handed to an individual.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said in a statement:
“A CEO needs to exercise sound judgement and set an example to staff at their firm. 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 has also laid out its findings and what it alleges to have occurred between Staley, Barclays and the regulator…
In August 2019, the FCA asked Barclays to explain what it had done to satisfy itself that there was no impropriety in the relationship between Mr Staley and Mr Epstein. In its response, Barclays relied on information supplied by Mr Staley. Mr Staley confirmed the letter was fair and accurate.
The letter claimed that Mr Staley did not have a close relationship with Mr Epstein. In reality, in emails between the two Mr Staley described Mr Epstein as one of his 'deepest' and 'most cherished' friends.
The letter from Barclays to the FCA also claimed Mr Staley ceased contact with Mr Epstein well before he joined Barclays. However, Mr Staley was in fact in contact with Mr Epstein in the days leading up to his appointment as CEO being announced on 28 October 2015. Mr Staley joined Barclays in December 2015.
While Mr Staley did not draft the letter there was no excuse for his failure to correct the misleading statements when he was the only person at Barclays who knew the full extent of his personal relationship with Mr Epstein and the specific timings of his contact with him. The FCA has found that Mr Staley was aware of the risk that his association with Mr Epstein posed to his career.
The FCA considers that, in failing to correct the misleading statements in the letter, Mr Staley recklessly misled the FCA and acted with a lack of integrity.
You can find the full statement here
In response, Barclays has said that Staley will now have to forgo £17.8 million in deferred bonuses and share awards, which were held while the FCA conducted its investigation. You can find the announcement from Barclays here
Staley has issued a statement on the decision through his lawyers Arnold & Porter. He said:
“If I had known who JE [Jeffrey Epstein] really was, there is absolutely no doubt that I wouldn’t be in the position I am in today. Prior to undertaking my former role, it was known that I had had a relationship with Jeffrey Epstein.
“I have worked tirelessly over the last 43 years and have genuinely supported many people/ social causes, where others might not have done so. I am very disappointed by the FCA’s decision and I will continue to challenge it. I will not comment any further until these proceedings are concluded.”
You can find more on this story via a report by The Times here
Other stories that matter…
1. The University of Cambridge, local authorities, and big employers in the area such as AstraZeneca and Microsoft have put together a plan to more than double the number of unicorns in Cambridge by 2035. The city wants to support more unicorns - start-ups valued at more than $1 billion (£813 million) - by building more labs and offices, improving transport links with Oxford and other cities, and setting up local hubs for researchers and entrepreneurs. Story here
2. With Next close to buying fashion retailer Fat Face for £100 million, Retail Week has done a big analysis on how chief executive Lord Wolfson has kept the company at the top of the industry for the last two decades. The piece is written by George MacDonald, the Retail Week executive editor, who has known Lord Wolfson for years, and reporter Chloe Mills. The piece references various comments from Lord Wolfson over the years, including this one on innovation: “Change and transformation are part of all of our work. We all take on new projects; there is no ‘business as usual’ because our business is constantly changing.” You can read the feature here
3. Fortune has taken a look at how companies are communicating with staff about the attack on Israel by Hamas, including how Uber has held educational sessions for its workforce. Piece here
4. The latest memo to investors by Howard Marks, co-founder of Oaktree Capital, says investors and businesses should prepare for a “sea change” because the world of ultra-low interest rates since 2008 is over. “This isn’t a song I’ve sung often over the course of my career,” he writes. “This is the first sea change I’ve remarked on and one of the few calls I’ve made for substantially increasing investment in credit.” Marks says that businesses may not find it as easy to obtain financing, that profit margins may erode and asset appreciation may not be as reliable. Piece here
5. General Electric and Safran are trying to find fake parts that were sold for use in their CFM56 engine for planes. A little-known London-based distributor is allegedly linked to the parts, according to a feature on this extraordinary saga by Bloomberg. which you can read here
And finally…
Business leaders in the US are watching the work of Deion Sanders as coach of college football team Colorado Buffaloes for ideas about how to lead turnarounds, according to an analysis by the Wall Street Journal. Sanders, a former NFL player, has transformed one of the worst teams in college football into one of the best within a few months. He has completely overhauled the playing staff and expressed extreme confidence in the team’s prospects, which has attracted criticism but also national attention. “If you look at it as a business turnaround - and, let’s face it, college football is a business - he’s done a lot of things right,” a former senior partner at McKinsey says in the piece. “He’s come in and set really high expectations, to the point where people are going, ‘You’re crazy.’” You can read the piece in full here
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Best
Graham