Jess Staley admitted that it was easy not to become friends with convicted pedophile Jeffrey Epstein.
That sentiment, expressed during the cross-examination of the former Barclays boss in a London courtroom in March, was less true than on Thursday.
The 68-year-old American found Epstein, a failed bid to overturn the lifetime ban imposed on him by the UK financial conduct authorities on his relationship with a deadly financial operator and prolific sex offender.
“The loss of his long-standing career is an inevitable outcome,” read the Superior Court’s decision to hear Staley’s appeal against the FCA.
Staley’s appeal was the last attempt by a banker to save a four-year career that spent most of its efforts at two of the world’s most important financial institutions: JPMorgan Chase and Barclays.
Instead, the month-long trial revealed some unpleasant truths to Staley. Some of them are unbearably personal. This was almost inevitable in cases that featured thousands of emails between a banker and his pedophile client.
As it is, Staley in the courtroom granted extramarital sex with an Epstein employee, and the court heard in April 2009 that Epstein had served a sentence to solicit minors, but Staley forwarded an email from him called “Uncle Jeffrey” to Staley’s student daughter.
Former Barclays boss Jes Staley is portrayed outside the courtroom here with his lawyer Kathleen Harris and has been filed for extensive cross-examination © Chris Ratcliffe/Bloomberg
If Staley wanted to distance himself from Epstein’s long shadow, the trial had the effect of opposition.
“I don’t know why Staley fought this,” said one banker. “Now, every time a sentence is written about him, Epstein is also mentioned.”
As if it could not get worse for Staley this week, he and Barclays face the prospects of a US class action after a judge ruled that a case from the pension fund could proceed this week. They claim that Epstein was misled about his relationship with Staley. Barclays did not immediately respond to requests for comment.
That could lead to another courtroom that Staley needs to talk about his relationship with a dead sex offender.
In London, the Rawlsville courtrooms play host to countless millions of commercial disputes. However, few summarise the members of the British royal family, important figures of British political establishment, two of the most well-known sexual predators in recent memory, and key figures of British political establishment. It is a testament to Epstein’s connections and influence in high societies across the United States and the Atlantic.
All this led to a four-paragraph letter signed by Barclays Chair Nigel Higgins and sent to the FCA in October 2019. The letter stated that Staley “had “not had any close connections” with Epstein, and that his final contact with him was “before he joined Barclays in 2015.”
That might have been the end. However, the FCA soon received a word from Staley’s former employer, JP Morgan (where Staley raised Epstein as a client), that it was owned by a massive email exchanged between the two men. UK regulators asked banks to hand over the evidence, and after four years of investigation, they banned Staley from holding a senior position in financial services and fined £1.8 million.
Staley’s appeal against the FCA, which he heard at the Rawls Building in London, will always be attracting attention ©Charlie Bibby/ft
The court concluded Thursday that the FCA was right to find out that Staley had recklessly misunderstood it. It was the first time a regulatory authority has banned a bank’s CEO for actions taken on clocks. His actions represented a “serious failure in judgment,” and the court concluded that he “acted in good faith.” Still, Staley’s fines have been reduced by almost 40% to £1.1 million to reflect the fact that Barclays had not allowed him to receive the deferred shares he was entitled to.
Presiding Judge Timothy Herrington filed a poignant charge of Staley’s evidence. Some of them highlighted what was “unreliable,” and some instances in which the statements of banker witnesses contradicted what he said in the stands, particularly regarding the nature of his relationship with Epstein.
Judge Herrington accepted that Staley and Epstein’s relationship began as experts, but said he was “professional and personally close.” He was also not convinced that communication between the two men had stopped before Staley became CEO of Barclays. He accepted the FCA argument that he communicated through Alexa Staley, the daughter of a banker.
“If asked if Staley had been in touch with Epstein in 2017, the correct answer to that question was “answered some inquiries that I had made with me through my daughter, although not in person,” Judge Herrington wrote.
Barclays Chairman Nigel Higgins, who signed a 2019 letter to the FCA, gave evidence at the trial. ©Jaimi Joy/Bloomberg
FCA officials have personally expressed relief in order to ultimately get a favorable ruling from Judge Herrington, who has retired after years of resigning after heavily criticising longtime watchdogs when he overturned the ban on three Julius Bear executives in 2023.
One former FCA official called the verdict a “solid result,” but added that “what confuses Staley’s reasons for bringing the case must have been that it hurt his reputation and removed him from his pocket despite the cuts in financial punishment.”
Staley has two weeks to decide whether to appeal or not, but FCA Director Therese Chambers has been able to hide little of the institution’s vibe of victory in its official response to the verdict. She said the former Barclays boss showed “a serious lack of integrity” and “the truth would never be revealed and he wanted him to escape with it.”
On his part, Staley said in a statement that he was “disappointed at how long and long it took this process to unfold.”
He added: “I have worked tirelessly throughout my career for my previous employer, and I am proud of the support I have given many individuals in that career and the strategies I have developed to support Barclays when they face enormous challenges.
The lawyer said a verdict was expected. When the bank letter he approved clearly misunderstood the regulators about how close his friendship with Epstein was, some expressed distrust that Staley thought he could win given the inherent weakness of his case.
“I think the Upper Court had the option other than to act recklessly and treat this as not open enough to the FCA,” said one city lawyer.
One person may have felt more sympathy for Staley than most. Hedge fund billionaire Crispin Ody is preparing to tackle similar legal challenges for the UK financial watchdog.
Recommended
The FCA banned Odey in March and fined £1.8 million for “lack of integrity” in his conduct following allegations of sexual harassment and assault rejected by the founder of the hedge fund. Watchdog’s actions were not based on accusations of sexual misconduct against Oddy himself, but on his attempts to deal with complaints about his actions and irritate the hedge fund’s efforts to bring about disciplinary procedures against him.
Odi, whose Honor Limp sues the Financial Times for reporting allegations of sexual misconduct, appears to have followed the case of women that many women made against him have done against him. Investors visited the unexpected court for discussion with Staley’s attorney in early April as the hearing approached the end.
“Looking forward, it’s interesting to think about the appeal of Crispin Audie,” said a former FCA official who was with the regulator when he looked into Staley. It seems unlikely that a Hamptons-based American banker will make mutual court visits when the time comes.
