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Nearly a year and a half after Jes Staley was banned from the City for allegedly lying about the depth of his relationship with sex offender Jeffrey Epstein, the former Barclays CEO arrived in court ready for a fight.
His attempt to overturn the City watchdog’s ruling in a two-week hearing covered in detail a lot of ground that was already in the public domain; but the Financial Conduct Authority dropped a bombshell on day eight.
The Rolls Building courtroom off London’s Chancery Lane fell silent as the barrister for the City’s financial watchdog outlined the contents of a binder handed to Staley.
Leigh-Ann Mulcahy KC explained she was not looking to invade the former banker’s privacy, but needed to establish his connections to Epstein, who the Financial Conduct Authority (FCA) alleges was much closer to Staley than previously claimed.
“You accept, do you, that you had sexual intercourse with a woman at Mr Epstein’s brother’s apartment on East 66th Street?,” Mulcahy asked, citing a New York address.
“Yes,” Staley said. The American ex-banker, who has a wife and two daughters, said it had been a staff member who worked for Epstein, the late financier who died in prison in 2019 while awaiting trial for trafficking underage girls for sex. “We had one encounter,” Staley told the court. “Much to my embarrassment today.”
It was a shock admission in a high-profile legal case that needed little help making headlines. The hearing – meant to determine whether the former high street bank boss lied about ties to a now-dead sex offender – had already named some of the world’s largest banks, business executives, politicians, celebrities and royalty in evidence.
The case, in fact, had been brought by Staley.
It was part of last-ditch efforts to salvage his reputation, and challenge the regulator’s investigation – dubbed Operation Downey – which also resulted in a £1.8m fine.
The ruling cost Staley a further £18m in pay and bonuses from Barclays, two years after he was forced to resign and effectively end his 43-year career in finance.
The case centred on the contents of a 2019 letter from Barclays to the FCA, which stated the pair “did not have a close relationship” and were last in contact “well before” Staley became its CEO in 2015.
But the FCA said the two men had a close relationship that “went beyond one that was professional in nature”, and presented Staley with evidence drawn from Epstein’s estate and a cache of 1,200 emails provided by his former employer JP Morgan.
Staley, who took the witness box from Monday, was asked to explain messages where the pair declared their “deep” and “profound” friendship and called each other “family”.
That included one November 2009 email, sent by Staley while staying at Epstein’s ranch in New Mexico: “So when all hell breaks lose [sic], and the world is crumbling, I will come here, and be at peace. Presently, I’m in the hot tub with a glass of white wine. This is an amazing place. Truly amazing. Next time, we’re here together. I owe you much. And I deeply appreciate our friendship. I have few so profound.”
Another, sent after their last in-person meeting at Epstein’s private Caribbean island in April 2015, thanked the late financier for a flight and lunch. “Your place is crazy and special. It has a warmth and silliness that makes it yours. I count u as a deep friend.”
But the banker – who claimed to have few personal friends – maintained these were merely exaggerations and indicative of his “effusive” communications style, a claimed echoed by his former chief of staff Sasha Wiggins, who took the stand last week.
She said Staley declared on numerous occasions that he never invited Epstein to his home or “milestone birthdays”, and defended his prior perception of the late financier, who had been jailed in 2008 for soliciting prostitution from a minor. “Mr Staley said to me once: ‘Why would I have introduced my wife and daughters to Mr Epstein if I thought he was a paedophile?’”
Staley denied keeping information from Barclays, including that he strategised with Epstein on how to handle media queries about their relationship in the weeks leading up to his appointment in 2015.
Staley also said he did not know why Epstein had sent him photos of women, including one in a low-cut dress, but said this was not uncommon for business friends, particularly “if you’ve ever worked on a trading floor in Wall Street”.
The ex-banker struggled to recall details surrounding the more notorious exchanges in which the pair discussed lovers and sex, corresponded from a debutante ball, or cryptically referred to their preferred Disney princesses.
Staley’s lack of explanation surrounding that exchange left Mulcahy to declare that his “lack of recollection seems surprising”.
All in all, Staley spent nearly four gruelling days in the witness box. At times, the otherwise affable American grew agitated under FCA questioning, particularly when the regulator alleged Epstein pulled strings in academia for his daughter. At times, Mulcahy had to remind Staley that she had to establish the facts, and that she, in fact, was the one asking questions.
The regulator said he also misled it when Barclays stated Staley’s contact with Epstein ended “well before” he joined the bank in 2015, with the pair emailing and calling until his appointment was announced on 28 October that year.
Later, the regulator said, the pair used Staley’s daughter to pass messages between them after Staley says he cut ties.Staley said he was unaware that his daughter was in contact with Jeffrey Epstein at the time.
But the 68-year-old American banker, who flew across the Atlantic to sit through the entirety of the two-week proceedings, attempted to shift blame to Barclays and the FCA.
He told the tribunal he was transparent with Barclays, and relied on its legal advice when approving the contents of the letter, including that “contact” meant the last time he was physically present with Epstein, who he last saw in April 2015.
Staley also blamed the FCA, saying it fell short by relaying queries to the Barclays chair, Nigel Higgins – who is still in the role – by phone rather than in writing. He says this left Barclays primarily concerned about dispelling whether Staley had any knowledge of, or involvement in, Epstein’s crimes, which Staley vehemently denies.
His legal battle forced some of the most high-profile regulators and bankers to the stand.
The Bank of England governor, Andrew Bailey, was among them, called because of his previous role as chief executive of the FCA. Bailey recalled that Higgins accused him of “destroying” Staley, as he relayed news of the investigation in December 2019, and asked whether the FCA might be willing to drop its investigation if Staley resigned. Bailey declined.
Staley told the court at the end of the FCA’s cross-examination on Thursday: “I have been honest such that I have put my marriage at risk these last few days. I have never shied away from telling the truth about all of this … I would not try to mislead the FCA. I never have and I never will.”
A decision is expected within three months of closing submissions, which are due to take place on 2-3 April.
