Barclays has come under fire over its handling of the links between former boss Jes Staley and paedophile Jeffrey Epstein.
In a blistering attack on the bank, a leading City investor said the board’s refusal to oust its former chief executive when his connections to the sex trafficker were probed by regulators was ‘unconscionable’.
Edward Bramson, the founder of Sherborne Investors, a former activist shareholder in the FTSE 100 bank which cut its losses in 2021, said Barclays investors were worried about the ‘demonstrably poor judgment’ of the board and feared ‘what new, unpleasant surprises will result from it’.
Leading shareholder advisory body ISS, meanwhile, said the bank’s board would face scrutiny at its AGM next month over its support for Staley, given the ‘disturbing nature’ of the charges against Epstein.
In a sign of what may be to come, Bramson lambasted Barclays chairman Nigel Higgins and his handling of the controversy around Staley, who led the bank for six years before quitting in 2021 amid a probe by the Financial Conduct Authority into his links to Epstein.
Scathing: Edward Bramson (right) said directors should be probed for backing ex-boss Jes Staley
While it was an investor in the bank, Sherborne pushed repeatedly for changes including the removal of its chief executive.
In a letter castigating the bank yesterday, Bramson, who has been based in New York since the 1970s, said: ‘We urged the board, as the situation deteriorated, to dismiss Staley, to allow for an orderly management transition, and to protect the bank from further reputational and other damage.’
But Barclays continued to support the financier despite his links to the late sex trafficker.
‘The board’s unconscionable refusal to do so only ended when the UK regulators forcibly ended this wretched spectacle over the board’s objections,’ 72-year-old Bramson wrote.
He called for Barclays to assess the directors’ support for Staley while he was being investigated and whether any of them had wanted to remove him, but did not dissent from decisions made by the board.
If warranted by the findings of these reviews, Bramson said the UK should use regulatory powers to ‘declare individuals no longer fit and proper to serve as directors’.
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 while awaiting trial on abuse and trafficking charges. By then, Staley had become the boss of Barclays. The bank backed him in 2020 after City regulators launched a probe, saying he ‘retains the full confidence of the board’. But Staley quit in 2021 following preliminary findings by the regulators though Barclays said it was ‘disappointed at this outcome’.
He has since been named in a series of lawsuits centring on Epstein’s behaviour. JP Morgan faces two civil suits alleging it enabled his behaviour – one from the US Virgin Islands, where Epstein had a home, and the other from an alleged victim.
The bank is in turn seeking to claw back tens of millions of dollars it paid Staley from 2006 to 2013 to cover costs it may incur as a result. Staley’s legal team has described the allegations about his connection to Epstein as ‘slanderous’ and ‘baseless’.
Bramson was similarly scathing of JP Morgan, saying the US bank had been ‘more than happy to keep the profits Staley brought in for them for many years’.
‘Now, when it is expedient, JPM’s legal and PR strategy, which may turn out to be ill-judged, is to deflect all blame on to Staley and, in the process, destroy his life, utterly,’ he said.
