Barclays criticized for not acting on Jeffrey Epstein: Bank executives should be probed for backing ex-boss Jes Staley, activist says
- Leading City investor said board’s refusal to oust former chief is ‘unconscionable’
- Edward Bramson: Barclays investors were concerned about “poor judgment” by the board
- Shareholder advisory body ISS said the bank’s governance would be scrutinized at the AGM
Barclays has come under fire for its handling of ties between former boss Jes Staley and pedophile Jeffrey Epstein.
In a blistering attack on the bank, a leading City investor said the board’s refusal to fire the former CEO when his connections to the sex trafficker were investigated by regulators was “unconscionable.”
Edward Bramson, the founder of Sherborne Investors, a former activist shareholder of the FTSE 100 bank that cut its losses in 2021, said Barclays investors were concerned about the board’s “arguably poor judgment” and feared “what new, unpleasant surprises will result. of it’.
Leading shareholder advisory body ISS, meanwhile, said the bank’s board of directors would come under scrutiny at next month’s AGM for its support of Staley, given the “troubling nature” of the charges against Epstein.
In a sign of things to come, Bramson slammed Barclays chairman Nigel Higgins and his handling of the controversy surrounding Staley, who ran the bank for six years before stepping down in 2021 amid an investigation by the Financial Conduct Authority into his ties to Epstein .
Damaging: Edward Bramson (right) said directors should be investigated for supporting ex-boss Jes Staley
While an investor in the bank, Sherborne repeatedly pushed for changes, including the firing of the CEO.
In a letter yesterday denouncing the bank, Bramson, who has been based in New York since the 1970s, said: “We have urged the board, as the situation deteriorated, to fire Staley, to ensure an orderly transition of management and to protect the bank. bank against further (reputational) damage.’
But Barclays continued to support the financier despite his ties to the late sex trafficker.
“The board’s unscrupulous refusal to do so only came to an end when British regulators, over the board’s objections, forcibly put an end to this miserable spectacle,” Bramson, 72, wrote.
He called on Barclays to assess the directors’ support for Staley while he was under investigation and whether any of them had wanted him removed, but did not disagree with the board’s decisions.
If the findings of these assessments warrant it, Bramson said the UK should use regulatory powers to “declare individuals no longer fit and proper to serve as a director.”
Epstein was a client of Staley’s when the latter was a senior executive at US bank JP Morgan.
The disgraced financier was found dead in 2019 awaiting trial for abuse and human trafficking. By then, Staley had become the boss of Barclays. The bank backed him in 2020 after city regulators launched an investigation saying he “retains the full confidence of the board.” But Staley dropped out in 2021 following preliminary regulators’ findings, though Barclays said it was “disappointed with this outcome.”
He has since been named in a series of lawsuits over Epstein’s conduct. JP Morgan is facing two civil suits alleging that it enabled his behavior — one from the US Virgin Islands, where Epstein had a home, and the other from an alleged victim.
The bank, in turn, is seeking to recover tens of millions of dollars it paid to Staley from 2006 to 2013 to cover the costs it may have incurred as a result. Staley’s legal team has described allegations about his connection to Epstein as “defamatory” and “baseless.”
Bramson was similarly scathing for JP Morgan, saying the U.S. bank had been “more than happy to keep the profits Staley pulled in for them for years to come.”
“Now, when it is appropriate, JPM’s legal and public relations strategy, which may turn out to be ill-judged, is to shift all the blame onto Staley, completely destroying his life in the process,” he said.