Jes Staley conceded that it would have been easier not to have been friends with convicted paedophile Jeffrey Epstein.
At no other time was that sentiment, expressed during the former Barclays boss’s cross-examination in a London courtroom in March, more true than on Thursday.
The 68-year-old American found out that he had failed in his bid to overturn a lifetime ban imposed on him by the UK’s Financial Conduct Authority over his ties to Epstein, the dead financier and prolific sex offender.
“The loss of his long-standing career is an inevitable consequence”, read the judgment of the Upper Tribunal, which heard Staley’s appeal against the FCA.
Staley’s appeal was a last-ditch attempt by the banker to clear his name and salvage a four-decade career spent in large part at JPMorgan Chase and Barclays, two of the world’s most important financial institutions.
Instead, the month-long trial brought some uncomfortable truths to light for Staley, some of them excruciatingly personal. This was almost inevitable for a case that featured thousands of emails between the banker and his paedophile client, including a cryptic reference to fairytale characters such as “Snow White” paying a visit.
As it was, Staley in court admitted to extramarital sex with an Epstein employee, and the tribunal heard how — in April 2009 as Epstein was serving a sentence for soliciting a minor — Staley forwarded an email from him to Staley’s student daughter, referring to him as “Uncle Jeffrey”.
Ex-Barclays boss Jes Staley, pictured here outside court with his lawyer Kathleen Harris, submitted to extensive cross-examination © Chris Ratcliffe/Bloomberg
If Staley hoped to distance himself from Epstein’s long shadow, the trial had the opposite effect.
“I have no idea why Staley fought this,” said one banker. “Now every time a sentence is written about him, Epstein will also get a mention.”
As if this week could not get any worse for Staley, he and Barclays now face the prospect of a US class action after a judge ruled this week that a lawsuit from pension funds can proceed. They allege that they were misled over Staley’s relationship with Epstein. Barclays did not immediately respond to a request seeking comment.
It could lead to yet one more courtroom in which Staley is required to recount his relationship with the dead sex offender.
In London, the courtrooms in the Rolls Building have played host to countless multimillion commercial disputes. But few other cases will have brought together a member of the British royal family, key figures in the UK political establishment, two of the most systemically important institutions and the most notorious sexual predator in recent memory; a testament to Epstein’s connections and influence in high society both in the US and across the Atlantic.
This was all down to a four-paragraph letter signed by Barclays chair Nigel Higgins and sent to the FCA in October 2019, two months after Epstein’s death in a New York jail cell awaiting trial on sex trafficking charges. The letter stated that Staley “did not have a close relationship” with Epstein and that his last contact with him was “well before he joined Barclays in 2015.”
That could have been the end of it. But shortly after, the FCA received word from Staley’s former employer JPMorgan — where Staley had nurtured Epstein as a client — that it was in possession of a trove of emails exchanged between the two men. The UK regulator asked the bank to hand over the evidence and, after a four-year investigation, banned Staley from holding senior positions in financial services and fined him £1.8mn.
Staley’s appeal against the FCA, heard at London’s Rolls Building, was always going to be high-profile © Charlie Bibby/FT
The tribunal concluded on Thursday that the FCA was correct to find that Staley had recklessly misled it. It was the first time the regulator had banned a bank CEO for actions taken on his watch. His behaviour represented a “serious failure of judgment” and he had “acted without integrity”, the tribunal concluded. Still, it ordered Staley’s fine reduced by almost 40 per cent to £1.1mn to reflect the fact that Barclays had not allowed Staley to receive deferred shares that he was entitled to.
Judge Timothy Herrington, the presiding judge, delivered a scathing indictment of Staley’s evidence, some of which “lacked credibility,” and highlighted several instances in which the banker’s witness statements contradicted what he then said on the stand, not least around the nature of his relationship with Epstein.
Judge Herrington accepted that Staley and Epstein’s relationship had started out as a professional one but said they had become “both professionally and personally close.” He was also not convinced that communication between the two men had stopped before Staley became Barclays CEO and accepted the FCA’s argument that they had communicated through Alexa Staley, the banker’s daughter.
“If Mr Staley had been asked in 2017 whether he had been in contact with Mr Epstein, the right answer to that question would have been “not directly but I did respond to some enquiries he made with me via my daughter,” wrote Judge Herrington.
Barclays’ chair Nigel Higgins, who signed the 2019 letter to the FCA, gave evidence at the trial. © Jaimi Joy/Bloomberg
FCA officials privately expressed relief to finally get a favourable ruling from Judge Herrington, who is retiring after years of harshly criticising the watchdog, most recently when the tribunal overturned its ban of three Julius Baer executives in 2023.
One former senior FCA official called the verdict “a solid result” but added that “it remains baffling why Staley brought this case which has damaged his reputation and must have left him out of pocket despite the reduction in the financial penalty.”
Although Staley has two weeks to decide whether to appeal, FCA director Therese Chambers could barely hide the agency’s triumphant mood in her official response to the ruling. She said the former Barclays boss had shown “a serious lack of integrity” and had “hoped that the truth would never come to light and that he would get away with it”.
For his part, Staley said in a statement that he was “disappointed by the outcome and the time it took for this process to play out.”
He added: “I have worked tirelessly for my prior employers for the entirety of my career; I am proud of the support I gave to many individuals during that career and the strategy I developed to help Barclays when it faced immense challenges. The Tribunal recognised what they described as ‘my long and distinguished career’.”
Lawyers said the verdict had been expected. Some expressed disbelief that Staley ever thought he could win, given the inherent weakness of his case when the bank’s letter that he approved had clearly misled the regulator about how close his friendship was with Epstein.
“I don’t think the Upper Tribunal had any option but to treat this as acting recklessly and not being sufficiently open with the FCA,” said one City lawyer.
One person may have felt more sympathy for Staley than most. Crispin Odey, the hedge fund billionaire, is preparing to mount a similar legal challenge against the UK financial watchdog.
Recommended
The FCA banned Odey in March and fined him £1.8mn for a “lack of integrity” in his conduct following allegations of sexual harassment and assault, all of which the hedge fund founder has denied. The watchdog’s action was not based on the sexual misconduct accusations against Odey themselves, but on his alleged attempts to frustrate his hedge fund’s efforts to address complaints about his behaviour and bring disciplinary proceedings against him.
Odey, who is suing the Financial Times for libel for its reporting of sexual misconduct allegations a number of women made against him, seems to have followed Staley’s case as he prepares to defend himself against the FCA, whose decision is provisional. The financier made an unexpected visit to the court for a discussion with Staley’s lawyer as the hearing drew to a close in early April.
“Looking ahead, it’s interesting to think about Crispin Odey’s appeal,” said a former senior FCA official who was at the regulator when it investigated Staley. It seems unlikely the American banker, who is based in the Hamptons, will make a reciprocal courtroom visit if the time comes.