At the end of four days of cross examination, Jes Staley stepped down from the witness stand and hugged his legal team.
It had been a gruelling week for the former Barclays chief executive, who said he had endured public humiliation and had put his marriage at risk as he fought to overturn a lifetime ban imposed by the Financial Conduct Authority over his relationship with the late paedophile Jeffrey Epstein.
The mere fact that he challenged the financial regulator would have been enough to generate headlines, particularly given references in court filings to Prince Andrew and Lord Peter Mandelson, the British ambassador to the US, who were both contacts of Epstein.
But during the London court hearing that finished earlier this week, Staley addressed numerous intimate emails he sent to Epstein. These included the now-infamous reference to Disney princesses such as Snow White, as well as the sex offender’s contacts with his daughter Alexa Staley, to whom the former Barclays boss forwarded correspondence referring to “Uncle Jeffrey”.
The 68-year-old American also admitted he had engaged in consensual sexual intercourse with a woman on Epstein’s staff at an apartment owned by the sex offender’s brother. This was information that had not previously been made public despite the many details that have emerged in court cases around the world since Epstein died in a New York prison cell in 2019 awaiting trial on sex trafficking charges.
With the courtroom drama concluded, Staley has to wait and see if his high-profile legal gamble to clear his name has paid off. A judgment is not expected for several weeks. Even a favourable outcome may leave the banker wondering if it had all been worth bringing his ties to Epstein back into the spotlight.
“You can’t think of anything more likely to further damage his reputation than pursuing this case,” said a leading UK financial services lawyer who asked not to be named because of client restrictions.
At the heart of the case, which was held in the Upper Tribunal that hears regulatory challenges, is a short letter Barclays chair Nigel Higgins sent to the FCA in 2019 — approved by Staley — that stated his chief executive “did not have a close relationship” with Epstein and their last contact was “well before” Staley had joined the UK bank in 2015.
The regulator was seeking reassurance that there was “no impropriety” in Staley’s relationship with Epstein.
The FCA banned Staley in 2023 for “recklessly” misleading the regulator after his former employer JPMorgan Chase handed over a trove of more than a thousand emails that it believed undermined the assurances Barclays had made in the letter. It was the second time the FCA had acted against the banker, having previously fined him in an unrelated case for attempting to unmask an anonymous whistleblower. Staley stepped down from the bank amid the Epstein probe in late 2021.
Epstein had been a key client of JPMorgan and remained one for several years following his initial conviction in Florida in 2008. Staley has insisted he did not lobby the bank to keep him as a client and indicated during the hearing that Epstein had at times known more about what was happening at the Wall Street behemoth than he did.
Evidence adduced in court included correspondence between Staley and Epstein infused with affectionate language. They included exchanges in which the two men referred to each other as “family”.
Yet the case is far from open-and-shut, legal experts said.
One top financial regulation lawyer not involved in the case said that despite the headlines, Staley had a path to victory. If the judges believe he was completely honest in the witness box, that the FCA was not clear enough about what it wanted, and that the responsibility for drafting the letter really lay with Higgins and Bob Hoyt, group general counsel at the time, then the panel could find in his favour.
Other lawyers disagreed, citing the FCA’s catch-all requirement to be full and frank with the regulator.
Leigh-Ann Mulcahy KC, acting for the FCA, sought to show Staley’s relationship with Epstein went beyond the anodyne description in Barclays’ letter.
The barrister pointed to exchanges between the two men in which Staley tells Epstein “I can’t tell you how much your friendship has meant to me” and Epstein apologises to the banker for “the full heat that you have taken as a result of our friendship”.
Under cross examination, Staley responded to many of Mulcahy’s questions by saying he could not recall conversations or events taking place. His muted presence stood at odds with that of a swashbuckling investment banker who led one of the UK’s most important financial institutions.
Staley maintained throughout that he had a “close professional relationship” with Epstein, although at one point conceded he was a friend. “He was a very close professional friend but he was not in what I would consider my inner circle of personal friends,” he told the court.
Wrapping up the FCA’s case, Mulcahy said Staley had “effectively argued that black is white” in insisting he did not have a close relationship with Epstein.
She also rounded on Staley’s performance during the trial, presenting him as an unreliable witness who gave contradictory and evasive answers.
Staley’s legal team argued the FCA had not proven its case that he had behaved with a reckless lack of integrity. His barrister, Robert Smith KC, argued the FCA’s initial enquiry in 2019 was too vague.
Though Staley is at the centre of the legal drama, a wider cast of characters have come under scrutiny for their actions, including Jonathan Davidson, a former senior FCA official, Higgins and Hoyt.
Staley has laid responsibility for the letter with Higgins and Hoyt, with whom he said he had been “transparent” about his ties to Epstein through various conversations with the two men and other senior executives at Barclays.
Higgins told the court he had “a different picture” of Staley and Epstein’s relationship based on the information now available to him.
“You just have to tell me, is there anything about you and these girls?” Higgins recalled asking Staley, even before the FCA’s 2019 request. Higgins told the court that Staley replied that there was not.
The FCA does not allege that Staley partook in Epstein’s crimes.
In brief comments in the final days of the hearing, Judge Timothy Herrington, who is presiding over Staley’s legal challenge, was critical of the “informal” way FCA officials handled some of their enquiries about his ties with Epstein.
“It was kicked off in an informal manner,” the judge said, adding it was “baffling” that the FCA had not made the full nature of its enquiry clear from the outset.
The judge criticised the lack of a proper record of a telephone conversation between Davidson and Higgins. The case is Herrington’s last in the UK, he told the tribunal.
Davidson called Higgins while the chair was on a walking holiday in Romania in August 2019 to seek reassurance about Staley’s links to Epstein. One lawyer described these informal exchanges as signs that an “old boys network” still permeates in the banking industry.
Staley’s camp may hold some stock in the fact that Herrington has been a harsh critic of the FCA in recent years, including when the tribunal overturned the FCA’s ban of three Julius Baer executives in 2023.
Staley’s outcome will be watched closely by the financial services industry, which has had little to go on by way of court rulings over non-financial misconduct. In 2021, a key decision from the tribunal that a criminal conviction on its own was not enough to find someone unfit to work in the industry, but must be “qualitatively relevant” to their professional life, came as a surprise to many.
Among those keeping a close eye on the outcome will be Crispin Odey, who made an unexpected visit to the court last month and spoke to a lawyer for Staley.
The FCA banned the hedge fund founder days later and fined him £1.8mn for a “lack of integrity” in his conduct after he faced allegations of sexual harassment and assault. Odey denies the allegations and is set to challenge the regulator’s decision.