Barclays Activist Opposes Nomination of CEO Staley to Board Over Epstein Ties

(Bloomberg) --

Barclays Plc's top shareholder called for the removal of Jes Staley from the board, deepening the criticism around the chief executive officer's ties with deceased financier and sex offender Jeffrey Epstein.

Edward Bramson's Sherborne Investors Management LP said in a letter on Monday it “strongly recommends” the board “rescind their unanimous recommendation to re-elect Staley” as a director at its annual meeting in May.

“The public interest not only requires the likes of Barclays to set the highest standards, but it also dictates that there should be unvarnished transparency on major ethical questions and on the suitability of individuals that lead them,” Sherborne Investors wrote in the letter.

Barclays declined to comment.

The bank disclosed in February that British regulators are probing how former JPMorgan Chase & Co. banker Staley characterized his relationship with Epstein, who died in his prison cell last year. Sherborne's latest request comes a week after it called on Chairman Nigel Higgins to end the British lender's “cycle of disruption.”

‘Terrible Precedent'

The criticism adds to growing questions over the future of Staley, who the board has said they fully support. The CEO could leave the lender as soon as next year, people with knowledge of the plan have said.

Sherborne, which said Monday it's now Barclays's largest shareholder, said any succession planning that allowed Staley to retire next year “would be a mistake and would set a terrible precedent for Barclays and for United Kingdom public companies in general.”

Epstein regularly brought Staley business when he ran JPMorgan's private bank and the two were close professionally, Bloomberg News has reported. Staley also visited Epstein in Florida when he was serving his sentence following a 2008 guilty plea of soliciting prostitution, in one case with a minor, the New York Times reported last summer.

“If Staley knowingly continued providing financial services to Epstein, which could have helped to facilitate the latter's child prostitution activities, in order to reap personal career benefits, it raises the question as to whether he is suitable to be an executive of a financial institution,” according to Sherborne.

This will be the second year that Sherborne has called for change at the Barclays investor meeting. Bramson lost his bid for a board seat last year while Staley plowed ahead with his plans to expand the investment banking business.

“We believe that it would be in everyone's interest to draw a line under this destabilizing situation, which has become a circus, as soon as possible,” Sherborne's letter said.

To contact the reporter on this story: Stefania Spezzati in London at sspezzati@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion Dakers, Ross Larsen

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