Former Barclays boss Jes Staley did not mislead the UK’s
financial watchdog over his relationship with disgraced financier Jeffrey
Epstein, Staley’s lawyers said on Monday at the start of a London court case in
which the former banker seeks to restore his reputation.
Staley appeared in court flanked by his lawyers as his
appeal against the Financial Conduct Authority’s intention to ban him from
working in the UK finance industry indefinitely, and fine him 1.8 million
pounds ($2.3 million), began at London’s Upper Tribunal.
The 68-year-old will next week be cross-examined over his
relationship with Epstein, whose 2019 arrest for sex trafficking minors and
subsequent death in custody brought scrutiny on the late financier’s many
high-profile associates.
Epstein’s crimes have also prompted lawsuits against
JPMorgan, where Staley was previously head of the private bank and had Epstein
as a major client, and public figures like Britain’s Prince Andrew as well as
against Staley himself.
Staley has fought to clear his name since 2021 when he left
Barclays, in response to the FCA’s initial decision to take disciplinary action
over a 2019 letter sent to the watchdog by Barclays.
The FCA said in 2023 that it intended to ban Staley as the
letter contained two misleading statements: that Staley “did not have a close
relationship” with Epstein and their last contact was “well before he joined
Barclays in 2015.”
Staley says both statements were accurate and that the pair
had only a “close professional relationship,” arguing his occasional visits to
Epstein’s private island or use of his private jet do not contradict that.
His lawyer, Robert Smith, said on Monday that the letter to
the FCA “was never intended to provide a definitive description of the
relationship.”
FCA lawyer Leigh-Ann Mulcahy earlier said the watchdog does
not allege Staley was aware of Epstein’s crimes after the latter’s 2008
conviction for soliciting a minor for prostitution.
She said in court filings, however, that Staley has
“consistently mis-stated the nature of his relationship with Mr Epstein, in
particular downplaying the closeness and extent of their connection”.
The FCA’s case centers on a cache of over 1,000 emails
between Staley and Epstein, in which Staley described their friendship as
“profound” and referred to Epstein as “family.”
The emails also feature previously reported references to
some of Epstein’s other well-known associates, such as Peter Mandelson, now
British ambassador in Washington, Microsoft founder Bill Gates and billionaire
investor Leon Black.
“Many people will have born the stigma of having to explain
why they had a long standing and close association with Mr. Epstein,” Staley’s
lawyer Smith said in court filings. “Mr. Staley does not stand in some unique
position in this regard.”
The FCA says the emails show Staley passed non-public
information to Epstein while at JPMorgan and updated Epstein on his application
for the Barclays CEO job.
Further emails obtained from litigation in the U.S. Virgin
Islands suggests that Staley’s daughter acted as an “intermediary” in 2016 and
2017, the FCA argues.
“Could you ask your dad if he would like to be considered
for Treasury,” Epstein emailed Alexa Staley in November 2016, weeks after
Donald Trump’s victory in the U.S. presidential election.
Staley’s lawyers, however, say the fact Epstein initiated
all five email chains with Staley’s daughter demonstrates that Staley was no
longer in contact with Epstein.
The appeal will hear evidence from Bank of England Governor
Andrew Bailey, who was FCA chief executive between 2016 and 2020, later this
week. Barclays Chair Nigel Higgins is expected to enter the witness box next
week, shortly before Staley.
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