Barclays CEO Staley in dispute with KKR over soured deal: WSJ

LONDON (Reuters) - Barclays Chief Executive Jes Staley is involved in a dispute with private equity firm KKR & Co , which is a client of the bank, the Wall Street Journal reported on Tuesday.

KKR has complained to Barclays over Staley's actions on behalf of his brother-in-law after a deal between Jorge Nitzan and the buyout firm went sour, the WSJ said, citing sources familiar with the case.

News of the KKR dispute comes at a sensitive time for Staley who faces regulatory scrutiny in the United States and Britain over his attempts to unmask a whistleblower.

KKR is unhappy about what it sees as a conflict with its interests as a Barclays client, the newspaper reported.

The alleged conflict was brought about by Staley interceding on behalf of his brother-in-law late last year by vouching for him to KKR's co-investors and helping to try and find a new investor for a Brazilian company called Aceco TI, the WSJ said.

The family of Staley's wife Debora Nitzan Staley and her brother Jorge founded data center company Aceco and sold the bulk of it to KKR in 2014.

However, Aceco's revenues have slumped since the acquisition, which KKR has blamed on wrongdoing by its former owners, alleging they concealed accounting fraud.

Nitzan, Aceco's former chief executive, has denied all allegations of wrongdoing at the company, saying its recent problems have been caused by Brazil's economic slump and post-acquisition mismanagement.

"We have a responsibility to protect the interests of our investors who we believe were defrauded in the sale of Aceco.  We would also note that we have been a longtime client of Barclays, which comes with its own responsibilities for Barclays," KKR said in an emailed statement to Reuters.

A spokesman for Barclays noted that the bank was not involved in the deal between Aceco and KKR.

"Appropriate senior personnel within Barclays have been kept informed about this matter, and in particular regarding any management interactions with the parties concerned," the Barclays spokesman said in an emailed statement.