Jes Staley conceded that it will have been simpler to not have been pals with convicted paedophile Jeffrey Epstein.
At no different time was that sentiment, expressed in the course of the former Barclays boss’s cross-examination in a London courtroom in March, extra true than on Thursday.
The 68-year-old American came upon that he had failed in his bid to overturn a lifetime ban imposed on him by the UK’s Monetary Conduct Authority over his ties to Epstein, the lifeless financier and prolific intercourse offender.
“The lack of his long-standing profession is an inevitable consequence”, learn the judgment of the Higher Tribunal, which heard Staley’s attraction in opposition to the FCA.
Staley’s attraction was a last-ditch try by the banker to clear his identify and salvage a four-decade profession spent largely at JPMorgan Chase and Barclays, two of the world’s most vital monetary establishments.
As a substitute, the month-long trial introduced some uncomfortable truths to mild for Staley, a few of them excruciatingly private. This was nearly inevitable for a case that featured hundreds of emails between the banker and his paedophile consumer, together with a cryptic reference to fairytale characters akin to “Snow White” paying a go to.
Because it was, Staley in court docket admitted to extramarital intercourse with an Epstein worker, and the tribunal heard how — in April 2009 as Epstein was serving a sentence for soliciting a minor — Staley forwarded an e mail from him to Staley’s scholar daughter, referring to him as “Uncle Jeffrey”.
If Staley hoped to distance himself from Epstein’s lengthy shadow, the trial had the alternative impact.
“I don’t know why Staley fought this,” mentioned one banker. “Now each time a sentence is written about him, Epstein may even get a point out.”
As if this week couldn’t get any worse for Staley, he and Barclays now face the prospect of a US class motion after a decide dominated this week {that a} lawsuit from pension funds can proceed. They allege that they have been misled over Staley’s relationship with Epstein. Barclays didn’t instantly reply to a request looking for remark.
It might result in but another courtroom during which Staley is required to recount his relationship with the lifeless intercourse offender.
In London, the courtrooms within the Rolls Constructing have performed host to numerous multimillion business disputes. However few different circumstances can have introduced collectively a member of the British royal household, key figures within the UK political institution, two of essentially the most systemically vital establishments and essentially the most infamous sexual predator in latest reminiscence; a testomony to Epstein’s connections and affect in excessive society each within the US and throughout the Atlantic.
This was all all the way down to a four-paragraph letter signed by Barclays chair Nigel Higgins and despatched to the FCA in October 2019, two months after Epstein’s loss of life in a New York jail cell awaiting trial on intercourse trafficking prices. The letter acknowledged that Staley “didn’t have a detailed relationship” with Epstein and that his final contact with him was “nicely earlier than he joined Barclays in 2015.”
That would have been the top of it. However shortly after, the FCA obtained phrase from Staley’s former employer JPMorgan — the place Staley had nurtured Epstein as a consumer — that it was in possession of a trove of emails exchanged between the 2 males. The UK regulator requested the financial institution at hand over the proof and, after a four-year investigation, banned Staley from holding senior positions in monetary companies and fined him £1.8mn.
The tribunal concluded on Thursday that the FCA was right to search out that Staley had recklessly misled it. It was the primary time the regulator had banned a financial institution CEO for actions taken on his watch. His behaviour represented a “severe failure of judgment” and he had “acted with out integrity”, the tribunal concluded. Nonetheless, it ordered Staley’s fantastic diminished by nearly 40 per cent to £1.1mn to mirror the truth that Barclays had not allowed Staley to obtain deferred shares that he was entitled to.
Decide Timothy Herrington, the presiding decide, delivered a scathing indictment of Staley’s proof, a few of which “lacked credibility,” and highlighted a number of situations during which the banker’s witness statements contradicted what he then mentioned on the stand, not least across the nature of his relationship with Epstein.
Decide Herrington accepted that Staley and Epstein’s relationship had began out as knowledgeable one however mentioned that they had develop into “each professionally and personally shut.” He was additionally not satisfied that communication between the 2 males had stopped earlier than Staley grew to become Barclays CEO and accepted the FCA’s argument that that they had communicated via Alexa Staley, the banker’s daughter.
“If Mr Staley had been requested in 2017 whether or not he had been in touch with Mr Epstein, the proper reply to that query would have been “indirectly however I did reply to some enquiries he made with me through my daughter,” wrote Decide Herrington.
FCA officers privately expressed reduction to lastly get a beneficial ruling from Decide Herrington, who’s retiring after years of harshly criticising the watchdog, most lately when the tribunal overturned its ban of three Julius Baer executives in 2023.
One former senior FCA official referred to as the decision “a stable consequence” however added that “it stays baffling why Staley introduced this case which has broken his fame and should have left him out of pocket regardless of the discount within the monetary penalty.”
Though Staley has two weeks to resolve whether or not to attraction, FCA director Therese Chambers might barely cover the company’s triumphant temper in her official response to the ruling. She mentioned the previous Barclays boss had proven “a severe lack of integrity” and had “hoped that the reality would by no means come to mild and that he would get away with it”.
For his half, Staley mentioned in a press release that he was “disillusioned by the end result and the time it took for this course of to play out.”
He added: “I’ve labored tirelessly for my prior employers for the whole thing of my profession; I’m happy with the assist I gave to many people throughout that profession and the technique I developed to assist Barclays when it confronted immense challenges. The Tribunal recognised what they described as ‘my lengthy and distinguished profession’.”
Attorneys mentioned the decision had been anticipated. Some expressed disbelief that Staley ever thought he might win, given the inherent weak spot of his case when the financial institution’s letter that he authorised had clearly misled the regulator about how shut his friendship was with Epstein.
“I don’t assume the Higher Tribunal had any possibility however to deal with this as performing recklessly and never being sufficiently open with the FCA,” mentioned one Metropolis lawyer.
One particular person could have felt extra sympathy for Staley than most. Crispin Odey, the hedge fund billionaire, is making ready to mount an identical authorized problem in opposition to the UK monetary watchdog.
The FCA banned Odey in March and fined him £1.8mn for a “lack of integrity” in his conduct following allegations of sexual harassment and assault, all of which the hedge fund founder has denied. The watchdog’s motion was not primarily based on the sexual misconduct accusations in opposition to Odey themselves, however on his alleged makes an attempt to frustrate his hedge fund’s efforts to handle complaints about his behaviour and produce disciplinary proceedings in opposition to him.
Odey, who’s suing the Monetary Occasions for libel for its reporting of sexual misconduct allegations plenty of girls made in opposition to him, appears to have adopted Staley’s case as he prepares to defend himself in opposition to the FCA, whose resolution is provisional. The financier made an surprising go to to the court docket for a dialogue with Staley’s lawyer because the listening to drew to a detailed in early April.
“Wanting forward, it’s attention-grabbing to consider Crispin Odey’s attraction,” mentioned a former senior FCA official who was on the regulator when it investigated Staley. It appears unlikely the American banker, who is predicated within the Hamptons, will make a reciprocal courtroom go to if the time comes.
