Ex-Barclays CEO Jes Staley says Jeffrey Epstein’s ‘remarkable’ network was valuable to him
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Lawyers for ex-Barclays Plc boss Jes Staley argued that the disgraced financier Jeffrey Epstein had “the most remarkable network of contacts” that benefited Staley professionally, as they kicked off a court challenge against his lifetime ban from financial services.
On Monday, Staley attended a London court to hear his lawyers push back against the Financial Conduct Authority’s findings that he misled both Barclays and the authority’s own interviewers when asked about the nature of his friendship with Epstein. The lawyers said that a set of emails showed that the pair had a “close professional relationship” but such a level of contact was normal for investment bankers.
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“Anyone reading the email correspondence in its entirety should reach the clear opinion that the range of his contacts and influence is not only astonishing but is probably without precedent,” the lawyers said in a filing. “The value of Mr. Epstein to Mr. Staley is obvious, given Mr. Staley’s own prominent position in banking and the financial sector.”
Staley is set to give evidence in person later in the trial, the first time he has testified in public about his relationship with Epstein. The case, the most high-profile legal battle between the watchdog and any executive in recent years, revolves around a letter Barclays sent to the FCA in 2019 that was intended to reassure the authority but would instead prompt the investigation.
The letter set out the extent and timing of the pair’s interaction, stating that Staley confirmed to the bank he “did not have a close relationship” with Epstein and he ceased contact “well before he joined Barclays in 2015.”
The FCA says Barclays’ letter was misleading, and recently widened its case to accuse Staley of misleading its own investigators in interviews. The regulator is relying on the email cache, obtained with US assistance from the Epstein estate in January last year, that described a closeness that contradicts Staley’s own statements.
“While the origin of the relationship was professional it evolved into a personal relationship,” Leigh-Ann Mulcahy, the FCA’s lawyer, told the judge.
Shortly before Staley’s CEO appointment was announced in late October 2015, he says he cut all ties with Epstein. It followed a conversation with a Barclays official whose “strong advice” was that he should cease all contact. Staley had earlier forwarded Epstein a press article that detailed links between the pair and then received a response of “Xx” that his lawyers described as “cryptic” — the last direct email between the two.
But the FCA says that Staley maintained contact with Epstein through his eldest daughter, who acted as an intermediary through the spring of 2017. In one instance, Epstein emailed Alexa Staley in November 2016 to gauge his interest in becoming Treasury Secretary in the first administration of US President-elect Donald Trump.
Fit and proper
For the regulator, the case is also a test of its ability to enforce its own rules on financiers being “fit and proper” to work in the industry.
“This is an important case about those duties, and about the conduct required of individuals who hold senior roles in the sector and who set an example to staff at their firm,” the regulator’s lawyers said. “The Authority wishes to make clear that it is not seeking to embarrass Mr. Staley and is not inviting the Tribunal to infer involvement in or knowledge of any misconduct on the part of Mr. Epstein.”
Epstein pleaded guilty in 2008 to Florida charges, including procurement of minors to engage in prostitution. He died while in jail on separate charges in 2019.
Staley, 68, stepped down from Barclays in 2021 and was banned from the sector about two years later. He has long downplayed his friendship with Epstein. The FCA’s investigation was neither fair nor impartial, his lawyers said, noting that the Barclays letter was drafted by the bank’s legal counsel and sent to Chairman Nigel Higgins for approval.
Staley says that the letter “was not intended to define the relationship” between himself and Epstein and was simply the bank’s response to a “very narrow and restricted” request from the regulator.
“This is a remarkably short letter dealing with such an important request,” Robert Smith, Staley’s lawyer said. Officials at the bank were responding to a verbal enquiry “as to what steps had been taken by Barclays to satisfy itself in the relationship,” Smith said. “The letter as drafted had no wider purpose.”
The hearing is due to continue until April 3.
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