Former Barclays CEO ‘rolled the dice’ on misleading regulator, tribunal hears

The former chief executive of Barclays “rolled the dice” on misleading the financial regulator over his relationship with paedophile financier Jeffrey Epstein, a tribunal has been told.

In 2023, Jes Staley was fined more than £1.8 million and banned from holding senior roles in the financial sector after the Financial Conduct Authority (FCA) found that he misled it over the nature of his association with Epstein.

In a letter to the FCA in 2019, approved by Mr Staley, Barclays claimed he did not have a “close relationship” with Epstein and their last contact was “well before” he joined the bank in December 2015.

But the regulator found that the letter was misleading and that Mr Staley acted “recklessly and without integrity” by allowing it to be sent.

The American, who is challenging the finding and the ban at the Upper Tribunal, has told the tribunal that while he had a close professional relationship with Epstein, it was not a close personal friendship.

However, making closing submissions at the hearing in London, Leigh-Ann Mulcahy KC, for the FCA, said that whether it was a close personal relationship or a close professional relationship is a “red herring”.

In written submissions, she said: “Mr Staley must also have been aware he was professionally at risk of losing his role as CEO if it became apparent he had given Barclays an incomplete and inaccurate picture of his relationship with Mr Epstein, and/or it emerged that he did in fact have a close relationship with Mr Epstein, with the reputational risk and regulatory issues that fact might invite.”

She added: “There were many competing risks for Mr Staley which provided a motive for taking a risk of misleading the authority.”

Ms Mulcahy told the tribunal: “He took the role, and rolled that dice. He must have known the risk.”

She said the statements Mr Staley made with regard to his relationship with Epstein “were factually inaccurate and misleading” because the two men did have a close relationship, and “direct contact occurred up to the the date of Mr Staley’s appointment”.

In written submissions, she added: “The statements were included in order to present distance in the relationship between the two men, both in its nature and temporally, in order to show that Mr Staley could not and should not have been aware of Mr Epstein’s misconduct.”

Ms Mulcahy said on Wednesday: “It is clear that Mr Staley considered Mr Epstein to be a mentor. He was somebody who he trusted.”

She added that Epstein seemed to have acted as “sort of kingmaker”, and that Epstein’s support of Mr Staley’s career “went well beyond the bounds of a typical professional relationship”.

Last month, Mr Staley told the tribunal he would share information with Epstein to obtain his “counsel”.

He also admitted sending information about his recruitment at Barclays, having unsuccessfully applied for the chief executive role in 2012 before being hired in 2015.

In his witness statement, Mr Staley accepted sharing information but added that “there was no conflict of interest created” between him and JP Morgan (JPM).

Mr Staley worked at JPM for more than 30 years and acted as a private banker to Epstein.

Mr Staley previously told the tribunal that the last time he physically met Epstein was in April 2015, although he continued email communication later into the year, but stopped before he took up his role at Barclays.

Mr Staley also said that he was not aware of the degree of Epstein’s behaviour and that he was of the understanding that the inquiry was looking at whether he knew of the convicted paedophile’s conduct.

In his written submissions, Robert Smith KC – who is representing Mr Staley, said the tribunal had to decide whether the FCA had proved that “in approving the draft letter, Mr Staley was aware that the facts stated therein were inaccurate and that they were capable of misleading the authority”.

He added that Barclays “had always been aware that Mr Staley and Mr Epstein had had a professionally close relationship”.

Mr Smith continued: “The enquiry which was made by the authority, and which was answered by Barclays in the draft, was not an enquiry into how Mr Staley or Barclays would define the relationship between Mr Staley and Mr Epstein, but whether Mr Staley had had knowledge of, or involvement in, Mr Epstein’s offending.

“The draft accurately answered that question. For the avoidance of any doubt, the final paragraph of the letter, both in draft and in its final form, made that abundantly clear.”

Mr Smith also told the tribunal that Mr Staley provided “significant information” to Barclays, and it “cannot reasonably be described as ‘downplaying’ the relationship” with Epstein.

He further said that Mr Staley had positive good character and that the tribunal is “judging a man in respect of whom it is inherently unlikely that he would have conducted himself in the way alleged, regardless of whatever findings of fact are ultimately made by the tribunal.”

The hearing before Upper Tribunal Judge Tim Herrington and tribunal members Martin Fraenkel and Cathy Farquharson is due to conclude later this week, with a ruling expected at a later date.