Activist Criticizes Barclays's Governance -- WSJ
February 26 2020 - 3:02AM
Dow Jones News
By Simon Clark
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 26, 2020).
LONDON -- The investigation by U.K. regulators of the
professional relationship between Barclays PLC Chief Executive Jes
Staley and Jeffrey Epstein, the late financier and convicted sex
offender, shows there is "governance weakness" at the British bank,
according to an activist investor.
Mr. Staley's interactions with Mr. Epstein date to at least
2000, when Mr. Staley led JPMorgan Chase & Co.'s private bank
and Mr. Epstein was a client. They remained in contact after Mr.
Epstein pleaded guilty in 2008 in a Florida state court to
soliciting prostitution from an underage girl. Mr. Staley has said
they last met in 2015. Mr. Epstein died in jail last year.
Edward Bramson, whose firm Sherborne Investors has a 5.5% stake
in Barclays, launched an activist campaign last year criticizing
Mr. Staley's strategy and unsuccessfully demanding a seat on the
board. Mr. Bramson renewed his criticism in a recent letter to his
investors after Barclays said Feb. 13 that the U.K. Financial
Conduct Authority is investigating the bank and its American chief
executive.
The regulatory probe is the second in two years for Mr. Staley.
He was fined in 2018 for attempting to unmask a whistleblower,
which U.K. regulators described as a " serious error of judgment."
U.S. authorities also fined him over the episode.
"Several months ago we raised our concerns with you about the
regulatory issues and the consequences for Barclays of the Epstein
imbroglio," Mr. Bramson wrote in the letter to investors in a
Sherborne fund holding Barclays shares, which was reviewed by The
Wall Street Journal. "This is another example of governance
weakness that has led, inevitably, to the recurrent public
disappointments and embarrassments which have plagued Barclays for
so long."
Barclays Chairman Nigel Higgins and the rest of the board
unanimously back Mr. Staley, the bank has said.
"We are hopeful that the board will treat these matters
seriously and that Mr. Higgins will be able to indicate what
long-term governance changes the board will make to end this cycle
of disruption," Mr. Bramson wrote.
A spokesman for Barclays declined to comment on the letter.
Mr. Bramson wants Barclays to scale back its investment banking
activities. Mr. Staley has defended Barclays's mix of businesses,
saying the bank is more resilient to market conditions by having a
large U.K. retail and business bank as well as a corporate and
investment bank in London and New York and a U.S. credit-card
business.
Mr. Staley said earlier this month that the model was working,
as net profit increased 54% to GBP2.46 billion ($3.18 billion) in
2019 from the previous year.
Mr. Bramson said in the letter that he has requested a meeting
with the Barclays chairman.
"We have the necessary resources to engage constructively with
the company for as long as necessary," Mr. Bramson wrote.
Write to Simon Clark at simon.clark@wsj.com
(END) Dow Jones Newswires
February 26, 2020 02:47 ET (07:47 GMT)
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