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Barclays chief executive Jes Staley investigated by FCA for links with Jeffrey Epstein

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Barclays’ chief executive Jes Staley is being investigated over his relationship with US convicted paedophile Jeffrey Epstein as it was revealed the American was handed a £2million pay rise by the bank today.

The Financial Conduct Authority (FCA) and the Prudential Conduct Authority will look the pair’s relationship during Mr Staley’s time running JP Morgan’s private bank.   

Barclays has said its board believes Mr Staley has been sufficiently transparent about his ties to Epstein, whom he said he had not seen since taking over as Barclays CEO in December 2015 – months after he visited the convicted sex offender’s ‘paedo island’ in the Caribbean.

He has always insisted that he subsequently cut their ties but the British authorities want to delve further into their relationship despite Barclays saying today it has full confidence in their CEO.  

The investigation announcement came on the morning the bank revealed its pre-tax profits for the past year jumped 25 per cent to £4.4 billion.

Barclays annual report, published this morning, shows that Mr Staley has been rewarded with a bumper pay packet of £5.93 million – up from £3.86 million a year earlier.

Barclays' chief executive Jes Staley (pictured in the bank's London HQ) is being investigated over his relationship with US convicted paedophile Jeffrey Epstein

Barclays' chief executive Jes Staley (pictured in the bank's London HQ) is being investigated over his relationship with US convicted paedophile Jeffrey Epstein

Barclays has said its board believes Mr Staley has been sufficiently transparent about his ties to Epstein

Barclays has said its board believes Mr Staley has been sufficiently transparent about his ties to Epstein

Barclays’ chief executive Jes Staley (pictured in the bank’s London HQ) is being investigated over his relationship with US convicted paedophile Jeffrey Epstein

Mr Staley told Bloomberg TV today: ‘It’s well known in the press that I have had a long standing professional, or had a longstanding professional relationship with Jeffrey Epstein. It began in 2000 when I was asked to run JP Morgan’s private bank and he was already a client of the bank at that time.

‘The investigation is actually focused on transparency and whether I was transparent with and open with the bank, and with the board, with respect to my relationship with Jeffrey Epstein. And indeed it’s clear in my own mind that going all the way back to 2015 when I joined Barclays, I have been very transparent with the bank and very open and willing to discuss the relationship that I had with him’.

The British bank also backed him today. 

In a statement to the stock market, Barclays said this morning: ‘As has been widely reported, earlier in his career Mr Staley developed a professional relationship with Mr Epstein.

‘In the summer of 2019, in light of the renewed media interest in the relationship, Mr Staley volunteered and gave to certain executives, and the chairman, an explanation of his relationship with Mr Epstein.’

Barclays added that the boss said he had had no contact with Epstein since joining his current employer in December 2015.

The bank added: ‘The relationship between Mr Staley and Mr Epstein was the subject of an inquiry from the Financial Conduct Authority, to which the company responded.

‘The FCA and the Prudential Regulation Authority subsequently commenced an investigation, which is ongoing, into Mr Staley’s characterisation to the company of his relationship with Mr Epstein and the subsequent description of that relationship in the company’s response to the FCA.’

 

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Director dealing: Bosses are buying shares, should you?

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Deal: Wizz Air boss Jozsef Varadi bought £643,000 of the airline’s shares

Deal: Wizz Air boss Jozsef Varadi bought £643,000 of the airline’s shares

Deal: Wizz Air boss Jozsef Varadi bought £643,000 of the airline’s shares

No-one knows where share prices are going to go from here, though some smart hedge fund managers may think they do. 

Markets in Britain and the US rallied a little last week, but there were sharp corrections along the way. 

Volatility, it seems, is with us for the foreseeable future. 

The understandable lack of clarity in investment thinking can be seen in the response from various investment houses. 

Invesco said on Thursday that in a ‘worst case’ scenario the S&P500 Index – a measure of the stock market performance of big listed companies in the US – could drop to as low as 1,400 in the next 12 months. 

A frightening fall in equity prices from here of 40 per cent plus. 

But its best case scenario points to a 20 per cent advance in share prices. 

Talk about hedging your bets. 

Meanwhile Janus Henderson believes the anticipated dip in corporate earnings across Europe of 25 per cent has already been factored into European equity prices. 

And fund manager John Bennett says European stock looks oversold and ready for a ‘bounce’ on better coronavirus news. 

But indicators suggested this previously – only for them to fall another 10 per cent. 

Schroders talks of a ‘flicker of light’ at the end of what is still set to be a ‘very long tunnel’. 

So, few words of comfort for investors from the investment experts. Few signals. So, hang on? Yes, don’t sell? Yes, buy? Maybe. 

Why it pays to watch directors

For investors, one of the few indicators of a firm’s share price prospects lies in whether their directors put their money where their mouths are – that is, buy shares in the companies they oversee, even when all the news is doom and gloom and the shares are sliding in price. 

In buying shares in their own firms, they are signalling they have confidence in the company’s future – and that the share price they are buying at represents good value. 

According to stockbroker Liberum, the ratio of share purchases to sales by directors of FTSE All-Share Index listed companies is running at ten to one. This is far higher than its five-year average of just above two-to-one. 

Although some of this buying may be an attempt by bosses to instil confidence in their firm’s shares, it can also be read as a signal that share prices are close to bottoming out and represent a buying opportunity for brave investors. 

So, although it seems an odd time to invest in airlines, when Wizz Air chairman William Franke spent £700,000 on shares in the Hungarian carrier, he was making a 41 per cent saving on the price he would have paid had he bought at the peak of the market on January 2. 

His chief executive Jozsef Varadi, the airline’s co-founder, did likewise. 

Laura Suter is personal finance analyst at wealth manager AJ Bell. She has been tracking the growing number of directors buying shares in their firms in the past month. 

She says: ‘As the Wall Street adage goes, there are many reasons why ‘insiders’ sell, but only one reason why they buy. It’s a signal that directors think shares in their businesses are under-valued.’ 

She adds: ‘Any buying by a company’s chief executive or its finance director is considered a powerful indicator of a company’s prospects as they are the individuals who are most likely to know the outlook and underlying performance of their business.’ 

Lee Wild, head of equity strategy at wealth manager Interactive Investor, says the spike in director purchases offers ‘some reassurance to investors who may be encouraged to see that management think all is not lost despite the economic and stock market turmoil’. 

Panic sells… but who’s buying 

AJ Bell has compiled a table of some of the most significant share purchases made by company directors in recent days – as well as those made by directors of stock market-listed investment trusts that provide investors with exposure to a spread of shares. 

They include big share buys by the bosses of FTSE 250 companies Plus500 (a financial firm) and IWG (an office group) – and by directors of investment trusts Syncona and RIT Capital. 

Gal Haber and Alon Gonen, co-founders of Plus500, have just bought multi-million pound tranches of shares in their business, at a combined cost of more than £8.75million. 

The purchases, made at £8.04 and £8.35 per share respectively, so far seem shrewd given the share price has risen to more than £10. It means paper profits for Haber and Gonen of more than £500,000 and £900,000 respectively. 

However, for Thomas Henderson, a director of Syncona, a trust investing in healthcare firms, his £2.47million purchase of shares has yet to yield paper profits. Shares in the trust currently trade at £1.93, compared to the £2.47 price Henderson paid – a paper loss to date approaching £600,000. 

The same goes for Philippe Costeletos, a director of £2.5billion trust RIT Capital. Its investment remit is on preserving the capital of shareholders, but his recent £504,000 purchase – a 9 per cent saving on the January 2 price – has since fallen in value by 10 per cent. 

As AJ Bell’s Suter says: ‘It is very hard for even well-informed executives to take a view on what will happen next.’ 

Will coronavirus sink house prices? 

The property market has been frozen as estate agents are instructed not to do viewings and valuations and surveys can’t happen.

Meanwhile, banking giants Barclays and Halifax have axed a big chunk of their mortgage ranges – only offering new deals through brokers to those with the largest deposits – and the industry says it has been overwhelmed with requests for mortgage holidays.

Amidst all this, many are asking the inevitable question: ‘What will happen to house prices?’

On this podcast, Simon Lambert, Lee Boyce and Georgie Frost look at what buyers and sellers can do, how the freeze is affecting those due to move, and explore what could happen next for the property market. 

Press play above or listen (and please subscribe if you like the podcast) at Apple Podcasts, Acast, Spotify and Audioboom or visit our This is Money Podcast page.  

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Savers will be hit by rate cuts, so be ready to look for a better deal

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Many savers can expect a round of brutal interest rate cuts to their accounts from this week – after the Bank of England base rate was slashed from 0.25 per cent to a record low 0.1 per cent just over a week ago. 

Savings rates now stand at an average 0.54 per cent. A decade ago accounts paid interest of as much as 5 per cent a year on savings. 

Although details about the latest cuts have yet to be revealed, some accounts were already having their rates trimmed. 

Piggy in the middle: Many savers can expect a round of brutal interest rate cuts to their accounts from this week

Piggy in the middle: Many savers can expect a round of brutal interest rate cuts to their accounts from this week

Piggy in the middle: Many savers can expect a round of brutal interest rate cuts to their accounts from this week

One of the most popular deals – the Santander 123 account – is cutting rates from 1.5 to 1 per cent on balances up to £20,000 from May. 

Customers will be charged £5 a month to keep the account, which allows you to earn £15 of ‘cashback’ a month. Those keen to protect savings from inflation – which stands at 1.7 per cent – must now consider putting money away for a long time. 

United Trust Bank pays 1.85 per cent fixed for five years while Investec pays 1.8 per cent for three years. 

Sarah Coles, personal finance analyst at broker Hargreaves Lansdown, says: ‘There is every chance that big rate cuts are on the way, so it will be vital to keep an eye on what your savings account is offering, and to switch if a rate is suddenly slashed.’ 

To escape the savings rate gloom, many may be tempted by cash prize draws – be wary as many deals are becoming less attractive. National Savings and Investments has announced it will slash the odds of anyone winning money with a premium bond. 

Around 173,700 fewer premium bond prizes will be handed out from May, compared to the number that was pulled out of the bag by its computer ‘Ernie’ in February. There will be five £100,000 prizes up for grabs in the May draw – down from the six offered in February. 

There will be 13,448 prizes of £100 being given to savers in May, compared to the 27,221 in February. Other savings institutions are also trying to encourage savers to join them by offering monthly prizes. 

Nationwide Building Society has a ‘start to save’ account paying 1 per cent and will enter anyone who pays in at least £50 a month for three consecutive months into a prize draw to win £100. 

Nationwide says if 50,000 people pay in £150 between April and June, the prize pot in July will be £75,000. Halifax offers monthly prizes totalling £550,000 to savers with £5,000 in accounts. Another is the Family Building Society’s ‘windfall bond’ with customers given a chance of a monthly prize of £50,000 if they have at least £10,000 in an account. 

To guarantee higher rates of return, savers may also consider moving money to fixed-rate bonds and tax-friendly Individual Savings Accounts. But be quick as deals could soon be withdrawn. 

According to rates scrutineer Moneyfacts, one-year fixed rate bonds currently pay an average of 1.1 per cent, while two-year and five-year bonds pay an average of 1.17 per cent and 1.49 per cent respectively. 

But rates on new accounts could be cut over the next few days. Such bonds usually have early exit penalties, but Chancellor Rishi Sunak has announced savers will be able to access notice funds without penalty as part of new Government coronavirus measures. 

Moneyfacts says some ‘easy access’ savings accounts have already disappeared. For example, Ford Money’s Flexible Saver has been withdrawn as have accounts from Earl Shilton (Heritage, for the over-50s) and Leeds (defined access saver). 

The notice account market has not escaped either, with Close Brothers Savings and Secure Trust Bank withdrawing products in recent days.

> Check the latest best buy savings deals in our independent tables 

Peer-to-peer offers a better return but beware the risks 

Anyone desperate to earn more from their savings may be tempted by peer-to-peer lenders. This is the practice of lending money to individuals or businesses through an online matching service. 

Rates typically offered are 4 per cent a year. But although tempting, it is important to be aware of the risks – and while the industry is regulated by the Financial Conduct Authority, it is not covered by the Financial Services Compensation Scheme, under which people can get back up to £85,000 of any losses if a company goes bust. 

There is also no guarantee that investors will get the target interest rate advertised and they could also face a big delay getting their money back. Peer-to peerlender Ratesetter has experienced a spike in saver withdrawals since the pandemic and it is not able to process requests as quickly as usual. It can mean delays of more than a week compared to the usual one day. 

Sarah Coles, of Hargreaves Lansdown, warns: ‘Peer-to-peer lenders state a target return. This may make people think they are like savings – but, in fact, they are very different. 

‘They are risky investments and there is no guarantee you’ll receive your target rate, and you could lose money.’ 

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TONY HETHERINGTON: A huge payments scam – and Nationwide and Visa should be ashamed

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Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. 

Ms K.P. writes: I fell for a sales pitch from Easytrade.biz, and now am unable to withdraw any money. 

I have filled in several withdrawal forms and received acknowledgements saying I will hear from them in two to four working days, but it never happened.

Cross-border fraud: This scam originated in Tallinn, Estonia and the authorities there warned it was trading illegally

Cross-border fraud: This scam originated in Tallinn, Estonia and the authorities there warned it was trading illegally

Cross-border fraud: This scam originated in Tallinn, Estonia and the authorities there warned it was trading illegally

Tony Hetherington replies: If anyone has a sense of déjà vu, this is because we originally printed your letter as long ago as last August, with a warning that Easytrade.biz is a scam, based in Tallinn in Estonia. 

The authorities there warned it was trading illegally, and while it offered to deal in shares, currencies and commodities, it had no permission to do so. The man behind the scam is Dutch citizen Floris Waals, and I reported that he was also the director of TRSystem, which had been the target for a public warning issued by our own Financial Conduct Authority. 

So, an internationally recognised cross-border fraud was taking place, and you had fallen victim to the tune of £1,250. But my report last August ended with a cliffhanger. After sending an initial £250 to the crooks by bank transfer, you paid them £1,000 on your Nationwide Visa card. 

And mysteriously, that £1,000 was not collected by Easytrade.biz, but by a firm called Fxplace, based in Nicosia in Cyprus. To me, this looked simple. You had never authorised any such payment to Fxplace. 

And when I investigated, I found that Fxplace was also pocketing payments that investors thought were going to Instafx24 and Trade Capital Investments, both crooked firms that the FCA also warned against. 

The whole arrangement reeked of money laundering, so I asked Nationwide to snatch back your £1,000 under Visa’s chargeback rules. Everything since then has been a huge letdown. 

It has exposed the thin veneer of investor protection that we all take for granted until we have to try to use it. Fxplace rejected Nationwide’s chargeback bid, and Nationwide surrendered. 

Nationwide’s bottom line was that the chargeback had missed the 120-day deadline for making claims under rules covering misrepresentation. I pressed Nationwide. 

It could forget the lies, false claims, and misrepresentations from Easytrade.biz. The blunt fact was that your payment to Fxplace was unauthorised. 

Not so, Nationwide told me. In its eyes, the fact that you had authorised a payment of £1,000 meant that it was fine for a completely different company, in a completely different country, to pocket that amount and benefit from those lies and false claims. 

So, I went over Nationwide’s head, to Visa itself. Fxplace is allowed by Visa to accept card payments, but did this make it all right, I asked, for Fxplace to rake in the proceeds of scams on behalf of firms that have never been authorised by Visa? I thought Visa took this seriously. 

I was asked to take part in a conference call with its officials, including a top investigator, and when this ended I was asked to give Visa a report of what I knew about Easytrade.biz, its boss, Fxplace, and other evidence of this huge scam. Well, I gave Visa my report. 

And I asked: is it acceptable under Visa rules for a cardholder to find that a payment to a firm that falsely poses as a Visa merchant, ends up with a completely different firm elsewhere in the world, with completely different terms and conditions? The closest I got to a straight answer was that Visa allows travel agents to book tickets with airlines using the customer’s card. 

Other than that, Visa clammed up, claiming that, ‘This is now a criminal investigation, but we have been requested not to make this public.’ 

Fine, I replied, I am happy to go along with any such request from the police, so which police force is tackling this? Visa refused to say. 

So, cardholders beware. Payments to one company can end up with another. Payments to one country can end up in another. Payments to a firm not allowed to use Visa can be claimed by a totally different firm that is approved by Visa. 

Easytrade.biz has vanished, and so has your money. But your card debt to Nationwide remains 

Easytrade.biz has vanished, and so has your money. But your card debt to Nationwide remains. Nationwide has knocked £85 off the bill ‘as a gesture of goodwill’, and it charged no interest for three months, during which you have paid off some of the balance, leaving about £700 due. Nationwide is now expecting this, along with 18.90 per cent interest. 

A few days ago you told me: ‘My tears and pleading came to nothing. I will beg, borrow or steal the £700 and clear the remaining debt on the next payment.’ 

Nationwide should be ashamed. Visa should be ashamed. 

And when society returns to normal, it is surely time to review the law and ask how companies like Nationwide and Visa can profit from the scams of others and still hold their heads high. 

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned. 

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