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Epstein links catch up with Barclays chief Staley

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November 1, 2021

By Iain Withers and Lawrence White

LONDON (Reuters) – For nearly six years running British bank Barclays, American Jes Staley built a reputation as a corporate survivor but the former JPMorgan dealmaker could not escape his past.

During a tumultuous tenure, Staley, 64, fought off a corporate raider’s attempts to break up the bank, survived a probe into his mistreatment of a whistleblower, and navigated Britain’s third-biggest lender through the coronavirus pandemic.

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But it was Staley’s links to convicted sex offender Jeffrey Epstein starting from his time at JPMorgan that finally forced him out.

Barclays said on Monday that Staley had stepped down as chief executive following an investigation by British regulators into his characterisation of his relationship with Epstein – both to Barclays and the regulators.

Details of the findings have yet to be published but the Bank of England and the UK’s Financial Conduct Authority have said previously the investigation was focused on how truthful Staley was about his ties to Epstein, who died in jail in August 2019 awaiting trial on charges related to sex trafficking.

While it was known that Epstein was Staley’s client at JPMorgan, media reports have painted a picture of a potentially deeper relationship, including a trip with his wife to Epstein’s Caribbean island.

Barclays said Staley intended to contest the findings of the UK investigation. It said the probe did not find that Staley either saw, or was aware of, any of Epstein’s alleged crimes.

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Staley has said previously he deeply regretted his ties to Epstein, which he says began in 2000 while at JPMorgan and ended in late 2015 – before he joined Barclays in December that year.

Epstein was registered as a sex offender in 2008 after a conviction for soliciting a minor for prostitution. The New York Times reported that Staley visited Epstein in prison when he was serving his sentence.

Staley did not respond to a request for comment made through Barclays on Monday.

QUESTIONABLE JUDGMENT

Staley joined Barclays when its board rolled the dice and hired the U.S banking veteran – once tipped as a successor to JPMorgan Chief Executive Jamie Dimon – to turn around its investment bank, which was badly trailing Wall Street rivals.

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After years of underwhelming trading results at the division, the bank faced a big test when activist investor Edward Bramson built up a stake of more than 6% stake and pushed to split the investment bank from its retail business.

Staley stuck to his guns and fought off the attack. His strategy was vindicated when volatile markets during the COVID-19 pandemic led to a jump in investment banking profits. Bramson admitted defeat in May this year.

Barclays insiders, especially traders in its investment bank, generally revered Staley for returning some swagger as the bank took on Wall Street rivals on their home turf, following the comparatively dour tenure of his predecessor Antony Jenkins.

Staley, who says he greatly admires his former boss Dimon, sought to emulate his mentor by hiring a raft of lieutenants from JPMorgan as he bet big on investment banking at a time when British rivals were cutting back.

He worked at the U.S. bank for 34 years, climbing up the ranks to lead its private bank, asset management unit and later chair its investment bank before leaving in 2013 to join a hedge fund after being sidelined in a management reshuffle.

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Staley’s judgment has been questioned during his time at Barclays. Lawyers said he was lucky to survive an investigation by regulators into his attempts to unmask a whistleblower who sent letters criticising a senior employee.

Regulators found that the bank’s efforts to track down the whistleblower became a transatlantic effort, with Staley’s office enlisting the support of the lender’s security team and an employee in the United States.

Staley was fined a combined 1.1 million pounds by regulators and Barclays but escaped more severe sanctions.

“This is not the first time Staley has faced negative headlines,” said Russ Mould, investment director at AJ Bell. “Ultimately his departure shows how important governance can be, particularly for a high profile company like Barclays which faces the glare of political and regulatory pressure.”

(Reporting by Iain Withers and Lawrence White; Editing by Rachel Armstrong and David Clarke)

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Business

Buying the Omicron dip

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November 29, 2021

A look at the day ahead from Danilo Masoni.

Sell first, get answers later. With stocks near lifetime peaks, the Black Friday reaction to the new fast-spreading virus strain Omicron was hardly surprising.

But a weekend later, investors look heavily engaged in buying the dip, as markets take a more balanced view of risks attached to what the WHO called a “variant of concern”.

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After their ninth biggest drop ever on Friday, gains in crude prices topped 5% earlier in Asia and stock futures point to a solid bounce across Europe and America.

A South African doctor said patients with Omicron have “very mild” symptoms and investment houses don’t look to have budged that much. Credit Suisse, for example, made no portfolio changes, staying slight overweight on equities.

Perhaps more telling is that retail traders poured north of $2 billion into U.S. stocks on Friday, setting the second biggest daily inflow on record, per Vanda Research data.

Of course there are uncertainties and that will likely make for volatile days heading into the Christmas shopping season.

Understanding the level of severity of the variant “will take days to several weeks”, said WHO. And vaccine maker BioNTech needs up to two weeks to figure out whether the shot it makes with Pfizer needs to be reworked.

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So while Omicron has spread from Australia to the Netherlands and governments ban travel and mull lockdowns, markets may also gamble on central bankers turning more patient in their path towards rates normalisation.

Lots of speakers from the Federal Reserve and the European Central Bank are lined up for today. On Sunday, speaking about risks to the recovery, ECB’s Lagarde said: “We now know our enemy and what measures to take.”

Key developments that should provide more direction to markets on Monday:

* ECB speakers: Governor Lagarde, ECB board members AndreaEnria, Isabel Schnabel, Pentti Hakkarainen; ECB Vice PresidentLuis de Guindos * Euro zone consumer sentiment/inflation expectations * German preliminary CPI/HICP * Fed speakers: Chairman Jerome Powell, New York PresidentJohn Williams, Governor Bowman * Emerging markets: Kenya central bank meets; Turkey tradebalance and bank NPL ratios (This story refiles to fix chart)

(Reporting by Danilo Masoni; Editing by Saikat Chatterjee)

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UK regulator set to block Meta’s Giphy deal – FT

Published

on

November 29, 2021

(Reuters) -The UK competition regulator is expected to block Meta Platforms’ acquisition of online GIF platform Giphy in the coming days, the Financial Times reported https://www.ft.com/content/662c8e3f-4909-4bec-9131-c0237bb4897d on Monday.

The Competition and Markets Authority is set to reverse the deal in what would be the first time the watchdog has reversed a Big Tech acquisition, the report said, citing individuals close to the matter.

Meta Platforms and the regulator did not respond to requests for comment from Reuters sent outside working hours.

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The regulator had in October fined the U.S. social media giant Facebook, now Meta, 50.5 million pound ($67.35 million) for breaching an order that was imposed during an investigation into its purchase of the GIF platform, Giphy.

Facebook bought Giphy, a website for making and sharing animated images, or GIFs, in May last year to integrate it with its photo-sharing app, Instagram. The deal was then pegged at $400 million by Axios.

($1 = 0.7499 pounds)

(Reporting by Sneha Bhowmik in Bengaluru; Editing by Uttaresh.V)

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Evergrande shares fall after chairman cuts stake; Fantasia suspends trading

Published

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November 29, 2021

HONG KONG (Reuters) – Shares in China Evergrande Group fell as much as 4.8% on Monday morning, after its chairman trimmed his stake in the cash-strapped property developer to raise about $344 million.

The group’s electric vehicle unit, China Evergrande New Energy Vehicle Group Ltd, also dropped more than 5% after it said the company was still exploring ways to pump capital into the unit with different investors.

Evergrande has been scrambling to raise capital as it grapples with more than $300 billion in liabilities and Chinese authorities have told its chairman, Hui Ka Yan, to use some of his personal wealth to help pay bondholders, sources have said.

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Evergrande failed to pay coupons totalling $82.5 million due on Nov. 6 and investors are on tenterhooks to see if it can meet its obligations before a 30-day grace period ends on Dec 6.

The developer disclosed late on Friday that Hui had sold 1.2 billion shares in the company at an average price of HK$2.23 each, lowering his stake in the Shenzhen-based real estate developer to 67.9% from 77%.

Once China’s top-selling developer, Evergrand’e troubles have hit the broader Chinese property sector with a string of debt defaults and credit rating downgrades of its peers in the last couple of months.

Fantasia Holdings suspended trading in company shares on Monday pending release of information. On Thursday, the developer said a winding-up petition was filed against a unit related to an outstanding loan.

(Reporting by Sumeet Chatterjee; Editing by Stephen Coates)

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