Last checked at 
* Staley leaves with immediate effect
* Replaced by C.S. Venkatakrishnan
* Staley says will contest regulators' findings
* Watchdog's review of its own probe could take months
-source
(adds details)
By Rachel Armstrong and Lawrence White
LONDON, Nov 1 (Reuters) - Barclays chief executive
Jes Staley is leaving the bank after a dispute with British
financial regulators over how he described his ties with
convicted sex offender Jeffrey Epstein.
Staley will be replaced as CEO by Barclays' head of global
markets C.S. Venkatakrishnan, who on Monday pledged to continue
his predecessor's strategy.
Staley's shock departure comes after Barclays was informed
on Friday of the unpublished findings of a report by Britain’s
Financial Conduct Authority and the Prudential Regulatory
Authority into Staley's characterisation of his relationship
with Epstein, who killed himself in jail in August 2019 while
awaiting trial on federal charges related to sex trafficking.
"In view of those conclusions, and Mr Staley's intention to
contest them, the Board and Mr Staley have agreed that he will
step down from his role as Group Chief Executive and as a
director of Barclays," the bank said.
"It should be noted that the investigation makes no findings
that Mr Staley saw, or was aware of, any of Mr Epstein's alleged
crimes, which was the central question underpinning Barclays'
support for Mr Staley following the arrest of Mr Epstein in the
summer of 2019."
Barclays shares fell 2% following the announcement.
"I THOUGHT I KNEW HIM WELL"
Staley dealt with Epstein during his long career at
JPMorgan, where Epstein was a major private banking client until
2013.
A college dropout who styled himself as a brilliant
financier, Epstein socialised in elite circles, including former
and future U.S. presidents. In 2008, he was registered as a sex
offender but continued to maintain ties with powerful players in
business and finance.
The New York Times reported in 2019 that Epstein had
referred “dozens” of wealthy clients to Staley. It also reported
that Staley visited Epstein in prison when he was serving a
sentence between 2008-09 for soliciting prostitution from a
minor, while Bloomberg reported he visited Epstein’s private
island in 2015.
Staley told reporters last February that his relationship
with Epstein had "tapered off significantly" after he left
JPMorgan in 2013, and that he had not seen the disgraced
financier since taking over Barclays in 2015.
"I thought I knew him well, and I didn’t. I’m sure with
hindsight of what we all know now, I deeply regret having had
any relationship with Jeffrey Epstein,” he said at the time.
Epstein’s links with prominent men have come back to haunt
some of them. Leon Black, the billionaire investor, stepped down
https://www.reuters.com/article/us-apollo-global-clayton-idUSKBN2BE1E0
from Apollo Global Management, the private equity firm he
co-founded, earlier this year after an outside review found he
had paid Epstein $158 million for tax and estate planning.
Britain’s Prince Andrew https://www.reuters.com/world/uk/prince-andrew-seeks-dismissal-accuser-giuffres-lawsuit-2021-10-29
has quit royal duties over his associations with Epstein, and
Microsoft co-founder Bill Gates has said it was a “huge mistake”
to spend time with him.
The FCA and PRA said in a statement they could not comment
further on the Epstein investigation, which was launched https://www.reuters.com/article/us-barclays-results-idUSKBN2070NF
after JPMorgan provided the regulators with emails
between Epstein and Staley from Staley's time as head of
JPMorgan’s private bank, the Financial Times reported last year.
RIGHT STRATEGY
Staley told staff in an internal memo seen by Reuters that
he did not want his 'personal response' to the investigations to
be a distraction.
"Although I will not be with you for the next chapter of
Barclays' story, know that I will be cheering your success from
the sidelines," he said.
Staley has 28 days to formally notify the FCA that he is
contesting its findings, after which an independent committee
inside the watchdog will uphold or reject its conclusions, a
source familiar with the process told Reuters.
If upheld, the probe passes to an independent Upper Tribunal
which again can back or reject the findings, the source said, a
process that could take months.
Venkatakrishnan, who followed Staley to Barclays from
JPMorgan and is known as Venkat, told staff on Monday the
strategy put in place by his predecessor was "the right one,"
according to a separate memo also seen by Reuters.
Venkat added that he would announce changes to the
organisation of the investment bank in the coming days, likely
to mean filling his previous role and any other resulting
vacancies, sources at the bank said.
Barclay's share price has fallen 9% since Staley's tenure
began six years ago, a period not without controversy.
His greatest success, insiders and analysts said, was to
fight off a campaign launched by activist investor Edward
Bramson in 2018 to have Staley removed on the grounds that
Barclays' investment bank was underperforming and should be cut
back.
Bramson sold his stake earlier this year, and the bank's
recent results have seen the investment bank perform strongly.
Also in 2018, Britain's financial regulators and Barclays
fined Staley a combined 1.1 million pounds ($1.50 million) after
he tried to identify a whistleblower who sent letters
criticising a Barclays employee.
(Reporting by Rachel Armstrong and Lawrence White, additional
reporting by Carolyn Cohn and Huw Jones, editing by Louise
Heavens, Kirsten Donovan)
