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The former CEO of Barclays Jes Staley will argue the bank had a “clear understanding” of the extent of his ties with Jeffrey Epstein when it sent a letter to regulators describing the relationship as “not close”, in a landmark trial opening on Monday.
Staley is attempting to clear his name and overturn a lifetime ban from senior roles in the financial services industry imposed by the UK’s Financial Conduct Authority in 2023. He stepped down as chief executive of Barclays in 2021 following an FCA investigation of the way he described his relationship with the disgraced financier and sex offender Epstein. Staley did not draft the letter, but the FCA ruled that he had “recklessly approved” it.
In his opening statement, which has been seen by the Financial Times, Staley said he had “explained sufficient detail of his relationship with Mr Epstein, in conversations with senior executives and board directors at Barclays . . . to provide them with a clear understanding that he has a close professional relationship with Mr Epstein, extending over many years”.
“This was also one of the factors which caused Barclays to retain confidence in Mr Staley after [the FCA] opened and continued its investigation.” The FCA began its probe in 2019.
Staley is seeking to disprove allegations made by the FCA in its opening arguments that he had displayed a “pattern of conduct” in repeatedly misrepresenting his relationship with Epstein to avoid damaging his career.
The ex-Barclays boss “was aware of the risk which his association with Mr Epstein posed to his reputation and his career”, the watchdog said in its arguments, which have been seen by the FT, adding that this was why he sought to “minimise the closeness and duration of his relationship”.
The FCA said Staley “must have been aware” of the risk that a letter from Barclays to the watchdog in October 2019 would be misleading: this stated that Staley had confirmed “he did not have a close relationship” with Epstein, and that they last communicated “well before he joined Barclays in 2015”.
The FCA had been sent a cache of emails from Staley’s former employer JPMorgan Chase that the regulator believed showed otherwise. This prompted it to launch the investigation that ultimately led to Staley being fined £1.8mn and given a lifetime ban.
“He was reckless as to that risk in allowing the misleading statements to be made to the authority, in circumstances where he was the only person at Barclays who actually knew the closeness of his relationship to Mr Epstein and the recency of his contact with him,” the FCA said in its opening arguments.
Staley has sought to frame his relationship with Epstein, who died in 2019 while awaiting trial on sex trafficking charges, as “one grounded in business” with some instances of social interaction.
“Mr Epstein had the most remarkable network of contacts,” Staley said in his opening statement. “The range of his contacts and influence is not only astonishing but is probably without precedent.”
Staley also argued that there was a discrepancy between what Barclays wanted to convey with the letter — that Staley did not know about or participate in Epstein’s crimes — and how the FCA interpreted it.
“The letter was not intended, when it was drafted and approved, to define the nature and history of Mr Staley’s relationship with Mr Epstein,” his opening statement said. “Had that been its purpose, it would have been drafted and approved in very different terms.”
The FCA said it was “not seeking to embarrass” Staley, nor was it “inviting the tribunal to infer involvement in or knowledge of any misconduct on the part of Mr Epstein”.
It added that it needed to be able to “rely upon the veracity and completeness of the representations made to it and openness in disclosing matters of which it would reasonably expect to be given notice”.
“This is an important case . . . about the conduct required of individuals who hold senior roles in the sector and who set an example to staff at their firm,” it said.
The two-week trial will draw in key City figures, including Bank of England governor Andrew Bailey, as well as Staley’s former colleagues at Barclays, which has long sought to distance itself from the episode.
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