What led the FCA to make such a decision?
The Financial Conduct Authority (FCA) has imposed a fine on former Barclays CEO James Staley amounting to £1.8 million amid allegations Staley “recklessly misled” the FCA on his relationship with the disgraced financier, Jeffrey Epstein. In addition to the fine, the FCA has banned Staley from holding a senior management or significant influence function in the financial services industry.
“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,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA.
“Mr 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 Mr Epstein.”
“Mr Staley has referred his Decision Notice to the Upper Tribunal where he will present his case. Any findings in the Decision Notice are therefore provisional and reflect the FCA’s belief as to what occurred and how it considers his behaviour should be characterised,” the news release noted.
A letter “recklessly approved”
The British financial regulator said Staley “recklessly approved” a letter sent by Barclays to the FCA, which contained two misleading statements about the nature of his relationship with Epstein as well as the point of their last contact.
According to the news release, the FCA asked Barclays in August 2019 to provide an explanation of its actions to satisfy there was no impropriety in the relationship between Staley and Epstein. Barclays relayed information supplied by Staley, and Staley confirmed the letter’s accuracy. He said he did not have a close relationship with Epstein; however, in emails between the two, Staley described Epstein as one of his “deepest” and “most cherished” friends.
In the letter, Staley noted he ceased contact with Epstein well before he joined Barclays. However, Staley was found to have been in contact with Epstein in the days leading up to his appointment as CEO being announced in October 2015. He joined Barclays in December 2015.
The FCA said, “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.”
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