Epstein, a convicted sex offender, was arrested in July 2019 on accusations of abusing numerous teenage girls in the early 2000s. He died by suicide a month later in his cell at the Metropolitan Correctional Center in New York City.
Barclays said it learned the preliminary conclusions from the Financial Conduct Authority and the Prudential Regulation Authority’s investigation on Friday night.
In view of the investigation’s conclusions, and Staley’s intent to contest them, Barclay’s board and Staley have “agreed that he will step down from his role,” according to a company statement. “The Board is disappointed at this outcome.”
Staley will be replaced by C.S. Venkatakrishnan, the bank’s head of global markets, the company said.
Staley, who spent three decades at JPMorgan Chase, has said he “deeply regrets” his relationship with Epstein. The two met around 2000, when Staley was leading JPMorgan’s private banking division. Staley has said their relationship tapered off over the years and that their last contact was in mid-2015.
The FCA investigation found that Staley had no knowledge of Epstein’s crimes, which was “the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019,” the company said.
Under his contract, Staley is entitled to benefits and a payout worth about $3.3 million, as well as moving expenses to the United States, Barclays said.
Venkatakrishnan spent decades with JPMorgan Chase before joining Barclays in 2016 as chief risk officer. The board had identified him as its “preferred candidate” to succeed Staley more than a year ago, Barclays said in the statement, which was why he was promoted to head of global markets in 2020. He took over the top job Monday, pending regulatory approval.
“The Board is confident that Barclays under his leadership will continue its strategic direction and improve performance in line with the progress of recent years,” Barclays said.
Barclays is a $45 billion operation and among the few investment banks that can compete with such Wall Street powerhouses as Goldman Sachs and JPMorgan Chase. The company said Staley clarified its strategy, transformed its operations and “materially improved its results.”
Russ Mould, investment director at AJ Bell, said Staley was ultimately successful at Barclays despite a raft of challenges including Brexit, the pandemic and a fierce challenge from an activist investor last year.
Yet Barclays shares have fallen 9 percent during Staley’s six-year run, even as Britain’s FTSE 100 climbed 14 percent during the same time frame, Mould noted Monday in comments emailed to The Washington Post. Shareholders will be looking to “Venkatakrishnan to improve upon that record.”
Ultimately, Mould said, Staley’s departure “shows how important governance can be, particularly for a high-profile company like Barclays which faces the glare of political and regulatory pressure more than many other businesses.”
In 2008, Epstein negotiated a plea deal with Florida prosecutors in a molestation case that allowed him to plead guilty to two charges of solicitation of sex, one with a minor. He spent just over a year in jail, with work-release privileges. Staley visited Epstein at his Palm Beach office, where he was allowed to serve some of his time, the New York Times reported.
Staley is among several high-profile names to face scrutiny over their ties to Epstein. Leon Black, the billionaire founder of Apollo Global Management, resigned in March after reports surfaced of his financial entanglements with Epstein. A law firm review revealed that Black paid Epstein $158 million for financial advice from 2012 to 2017.
Leslie Wexner, the founder of L Brands, came under fire for his personal ties to Epstein, who managed Wexner’s money and was closely involved with his charitable foundation for more than a decade. Before stepping down as CEO in February 2020, Wexner alleged that Epstein had “misappropriated vast sums of money” from him and his family.
Epstein reportedly preyed on women by telling them he was a talent scout for Victoria’s Secret, the New York Times reported. The lingerie company had been a unit of L Brands at the time but is now a stand-alone company.
In July 2020, L Brands said it had hired an outside firm to review its relationship with Epstein, although it has not made the results of that investigation public. L Brands changed its name to Bath & Body Works this past August and now trades under the ticker symbol BBWI.
Other well-known acquaintances of Epstein include former presidents Bill Clinton and Donald Trump, Microsoft founder Bill Gates and Britain’s Prince Andrew.