Britain's financial regulator, the Financial Conduct Authority (FCA), announced on Thursday that it has imposed a £1.8 million fine on Barclays’ former Chief Executive, James Staley. The fine comes in the wake of allegations that Staley "recklessly misled" the FCA regarding his relationship with the disgraced financier, Jeffrey Epstein.

Jeffrey Epstein, who was awaiting trial on sex-trafficking charges, tragically took his own life in jail in 2019, and his connections have come under intense scrutiny.

FCA's Thorough Investigation Reveals Serious Regulatory Breach

The FCA, after a thorough investigation, found that Mr. Staley had "recklessly approved a letter sent by Barclays to the FCA. The letter contained two misleading statements, about the nature of his relationship with Jeffrey Epstein and the point of their last contact." These actions, according to the FCA, constituted a serious breach of regulatory expectations.

In response to the FCA's findings, Barclays has announced that its Remuneration Committee has decided that James Staley should be ineligible for, or forfeit, bonuses and long-term incentives amounting to a significant £17.8 million ($21.89 million).

Staley has appealed against the FCA's findings to the Upper Tribunal. It means that the FCA's findings are provisional and subject to further legal proceedings.

We've fined former CEO of Barclays, James Staley, £1.8 m and banned him from holding a senior management or significant influence function in the #FinancialServices industry. https://t.co/tc6zmIoNYt

— Financial Conduct Authority (@TheFCA) October 12, 2023

Barclays' Response: FCA Accuses of Misleading Statements

The Bank of England, in a separate statement, expressed its support for the FCA's decision against James Staley. "It is imperative that senior managers act with integrity and are open and cooperative with the regulators," the Bank of England emphasized.

"In its response, Barclays relied on information supplied by Mr. Staley," the FCA said. "Mr. Staley confirmed the letter was fair and accurate. In reality, in emails between the two, Staley described Epstein as one of his 'deepest' and 'most cherished' friends."

The FCA emphasized that a chief executive needs to exercise sound judgment and set an example for the staff at their firm.

"Mr. Staley failed to do this," said Therese Chambers, the FCA's joint Executive Director of Enforcement and Market Oversight. "We consider that he misled both the FCA and the Barclays Board about the nature of his relationship with Mr. Epstein."

The investigation into Staley's relationship with Epstein began in August 2019. The FCA requested an explanation from him about the steps he had taken to ensure that there was no impropriety in his connection with Epstein.