Images received by the former Barclays chief executive Jes Staley from child sexual abuse offender Jeffrey Epstein were of “mature women” and ultimately “innocuous”, his lawyers have argued, as they tried to discredit claims that the ex-banking boss lied about the depth of the two men’s relationship.
The comments were made on the first day of a legal battle in which Staley is trying overturn the decision by the Financial Conduct Authority (FCA) to ban him from senior roles in the UK’s financial sector, after its investigation found he misled the regulator over the nature of his relationship with Epstein.
The former Barclays boss, who resigned in 2021, was also fined £1.8m and subsequently lost out on £18m in pay and bonuses from the bank.
The FCA has made no allegations that Staley was either involved in or witnessed the kind of conduct that led to Epstein’s arrest in 2019. Epstein died in August 2019 in prison while awaiting trial on charges of trafficking underage girls for sex.
One of Staley’s lawyers, Robert Smith KC, told a courtroom on Monday that while the FCA case relied on hundreds of email chains between the pair, some of their correspondence required additional context.
That, Smith said, included two emails with photos of women attached. “The two women depicted in the images were mature women. The images were innocuous.”
“One of them was a lady in an evening gown,” Smith added “That image should be read in the context of a comment by Mr Epstein that Mr Staley had chosen to spend his time with a man who was the former secretary to the US Treasury and who was now the head of the University of Harvard while Mr Epstein had been obliged to spend his time with the lady in question.”
“None of the correspondence attaching the images involved any response by Mr Staley in relation to the appearance of either of the two women,” Smith added.
The two-week hearing at the upper tribunal in London, which started on Monday, centres around a letter sent by Barclays to the FCA in October 2019, which said “Jes has confirmed to us that he did not have a close relationship with Mr Epstein” and that his “last contact with Mr Epstein was well before he joined Barclays in 2015”.
The FCA is arguing that the relationship between the pair was “indeed close” and it “went beyond one that was professional in nature”.
Its own formal investigation, launched in December 2019 after the watchdog received further information from Staley’s former employer JP Morgan, also found Staley was in contact with Epstein in the days leading up to his appointment being announced in autumn 2015.
The regulator is alleging that the pair later used Staley’s eldest daughter as an “intermediary” to stay in touch long after he became Barclays’ chief executive, until at least February 2017.
Staley’s lawyers do not dispute that his daughter spoke to Staley about emails from Epstein, but says he does not remember the conversations.
The FCA’s barrister, Leigh-Ann Mulcahy KC, told the tribunal that Staley had a “motive to downplay his relationship” with Epstein, particularly after Epstein was arrested in 2019 for trafficking underage girls for sex.
She added that there had been a “pattern of underplaying his relationship” going back years, including when responding to media inquiries about their ties from titles such as the Mail on Sunday in 2015, and in talking points prepared for the board of Bowdoin College in September 2019, where he was a trustee, after it asked for more information.
Staley appeared in court for the start of proceedings. Wearing a dark grey suit and blue tie, the former executive sat with members of his legal team as opening arguments were delivered to a tribunal panel led by Judge Tim Herrington.
Staley’s legal team is disputing the true purpose of a letter that Barclays sent to the FCA in October 2019, as well as claiming that members of the bank’s board had been briefed on the extent of his ties with the late financier.
Staley’s lawyers will argue that the FCA had only asked for assurances around whether Staley or Barclays “had any knowledge of, or involvement in, Mr Epstein’s unlawful conduct”, rather than the extent and nature of their relationship. The lawyers claim that the letter would otherwise have “been drafted and approved in very different terms”.
“Barclays knew that Mr Staley had had a ‘close’ professional relationship with Mr Epstein which had extended over many years … [and] that there were aspects of that relationship which were not confined to business,” the opening statement said.
The FCA’s case will outline the depth of their alleged relationship, including claims that Epstein messaged Staley about sex, women and foreign holidays, while working behind the scenes to bolster Staley’s career by liaising with government officials, business leaders and royalty.
The hearing is due to continue until at least 14 March.
