The Financial Conduct Authority has fined and banned James Staley, former CEO of Barclays, from the financial services industry due to misleading statements made about the nature of his relationship with Jeffrey Epstein.
The regulator said today (12 October) it had decided to impose a £1.8m fine and a ban preventing Staley from holding a senior management or significant influence function in the financial services industry.
The decision stemmed from the fact that the former Barclays CEO "recklessly approved" a letter sent by the bank to the regulator, which contained two "misleading statements" about the nature of Staley's relationship with Jeffrey Epstein and the point of their last contact, the FCA said.
In 2019, the regulator asked Barclays to explain the steps it had taken to assess there had been no impropriety in the relationship between Staley and Epstein.
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The FCA said the Barclays letter claimed the ex-CEO did not have a close relationship with Epstein and that he had ceased contact with the financier well before he joined the bank.
But the regulator found that in emails exchanged between the two, Staley described Epstein as one of his "deepest" and "most cherished" friends, and discovered the two were in contact at the time when the bank's board had approved his appointment as CEO in October 2015, before it was in the public domain.
The FCA acknowledged Staley did not draft the letter himself, but as the only person who knew the full extent of his relationship with Epstein, it was his responsibility to correct the misleading statements.
As a result, the regulator said Staley "recklessly misled the FCA and acted with a lack of integrity".
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: "A CEO needs to exercise sound judgement and set an example to staff at their firm. Staley failed to do this. We consider that he misled both the FCA and the Barclays board about the nature of his relationship with Epstein.
"Staley is an experienced industry professional and held a prominent position within financial services. It is right to prevent him from holding a senior position in the financial services industry if we cannot rely on him to act with integrity by disclosing uncomfortable truths about his close personal relationship with Epstein."
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The FCA noted Staley has referred the decision notice to the Upper Tribunal, meaning that any findings in the notice are to be considered provisional.
Following the regulator's decision, Barclays said in a regulatory notice today (12 October) that Staley should be ineligible for or forfeit a number of awards worth £17.8m, including his 2021 bonus award and unvested long-term incentive plan awards.
The bank's remuneration committee had previously suspended all of Staley's deferred bonus and LTIP awards pending further developments in the regulatory and legal proceedings related to his investigation by the FCA and PRA.
