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Former Barclays boss Jes Staley discussed confidential deals and clients with the late sex offender Jeffrey Epstein, including details about fraudster Bernard Madoff, according to a court filing by the UK financial watchdog.
Emails Staley sent to Epstein were cited by the Financial Conduct Authority as evidence the banker had misled the regulator when he assured it that the pair “did not have a close relationship”.
When Staley worked at JPMorgan Chase, prior to joining Barclays, he asked Epstein for advice on how to get a higher pay package out of his boss Jamie Dimon, and shared non-public details of a client of the US bank, the FCA said in its written argument against the former Barclays’ boss.
Staley has launched a legal challenge against the FCA’s decision in 2023 to ban him from working in UK financial services and fine him £1.8mn for having “recklessly misled” it and acting “with a lack of integrity” over the nature of his relationship with Epstein, a client of the Wall St bank.
Staley is due to testify in the case in March and faces three days being cross examined by the FCA’s lawyers, a London court heard on Thursday at a pre-trial review.
The regulator said the details of email traffic between Staley and Epstein, which first came to light in a US lawsuit, supported its finding that the former Barclays boss had provided “inaccurate and misleading” statements to the UK regulator when asked about their relationship.
“Between 2008 and 2011, Staley shared confidential information relating to his former employer, JPMorgan with Epstein showing the closeness of their relationship and Staley’s willingness to breach obligations owed to his employer including where there was a conflict of interest between JPMorgan and Epstein,” the FCA said.
It said that Epstein forwarded to Staley an email written by Larry Summers, the former US Treasury secretary, asking: “What is the real story on Madoff? Shouldn’t JPM have known better?” Madoff, a former client of the US bank, was sentenced to 150 years in jail in 2009 for orchestrating a $65bn Ponzi scheme. He died in 2021.
The FCA said that Staley had answered: “I can’t reply in email. Will call”, which the regulators said indicated “he was prepared to discuss the issue with Mr Epstein”.
The regulator said it found evidence that Epstein, who died in prison in 2019 after being arrested on charges of sex trafficking minors, had “provided significant support” to Staley’s daughter in her education and career and she invited him to her 2013 graduation.
In response to the FCA’s written argument, Staley acknowledged that the information he shared with Epstein was “not public information” but denied that it was confidential to JPMorgan.
A letter sent by Barclays to the FCA and approved by Staley had assured the regulator that Staley ceased contact with Epstein “well before” he joined the bank in 2015.
But the regulator said Staley was in contact with Epstein in the days leading up to his appointment as Barclays chief executive being announced in 2015 and the convicted sex offender had tried to help him get the job.
In its most recent response filed with the court, the FCA claimed that contact between the two men had actually continued into “at least” February 2017, using Staley’s daughter Alexa as an intermediary.
Staley has responded that the FCA did not fully take into account “the sporadic nature” of the emails exchanged between his daughter and Epstein, which took place over a period of 11 months and started five months after the banker’s last correspondence with Epstein.
The former Barclays boss put his inability to recollect conversations with his daughter about the emails down to “the passage of time and his professional commitments”.
Lawyers for Staley, 68, argue that the FCA’s process was “unfair” and that the penalty it imposed was “grossly disproportionate”.
The FCA decided to launch an investigation without giving Staley an opportunity to provide an explanation for “any apparent inconsistency” in his statements, they said.
In written arguments, Robert Smith KC, for Staley, said the FCA’s contention that Staley was in contact with Epstein as late as 2017 via his daughter was “not supported by the evidence”.
He added that the FCA had been able to point to only “a handful of occasions” in which the two interacted socially over a period of almost 10 years.
Staley met Epstein in about 1999 while head of JPMorgan’s private bank, of which Epstein was a client. Epstein was convicted of procuring a minor for prostitution and sentenced to 18 months in a Florida prison in 2008.
Leigh-Ann Mulcahy KC, representing the FCA, said in legal documents that Staley’s association with Epstein “inevitably raised questions about his conduct and judgment”. She said the sanctions imposed on Staley were “appropriate” and “proportionate”.
