Barclays Chair told FCA Epstein-Staley ties did not need board review in 2019

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By Stefania Spezzati and Iain Withers

LONDON (Reuters) – Barclays chairman Nigel Higgins believed the bank’s former CEO Jes Staley’s ties with the late disgraced financier Jeffrey Epstein did not warrant a board discussion in the summer of 2019 after Britain’s financial regulator inquired over the matter, according to court documents.

Staley is challenging the Financial Conduct Authority’s (FCA) decision to ban him from working in the British finance industry in a London court after it decided he misled the watchdog over his relationship with Epstein.

The case has once again shone a light on Barclays’ handling of the departure of Staley, who left the British bank in 2021, and the ties Epstein had with a variety of rich and influential people around the world.

The FCA’s former executive Jonathan Davidson spoke to Higgins in mid-August 2019 and asked him whether Barclays had satisfied itself about the nature of the relationship between Staley and Epstein following media articles.

“I recall informing Mr Davison that there had been no board discussion, but that Mr Staley had come to me and told me about the nature of the relationship” with Epstein, Higgins said in a witness statement.

Higgins told Davidson that he “did not think it needed a board discussion, but that we would get something to him when we were all back from holiday.”

Higgins later asked fellow Barclays board member Crawford Gillies to speak to Staley about the matter, who he said raised no issue and did not propose reporting it to the board.

Later in 2019, Barclays wrote to the FCA stating that Staley had told the bank he did not have a close relationship with Epstein.

Staley’s ties to Epstein raised questions on whether chairman Higgins and the bank’s board properly vetted the former CEO’s relationship with Epstein. Last month, the London-based bank said in its annual report it had extended Higgins’ chairmanship for another three years.

In his written testimony, Staley said that he “was never asked to provide more than I did, nor did I consider that the request for information made by the FCA to Mr Higgins on 15 August 2019 needed me to do so”.

The FCA alleges Staley “recklessly” approved the letter, which it has said contained two misleading statements about how close he was to Epstein and that his last contact with the financier was “well before he joined Barclays in 2015”.

The FCA’s case centres on a cache of over 1,000 emails between Staley and Epstein, including those from JPMorgan in which Staley described their friendship as “profound”.

Last week, Bank of England Governor Andrew Bailey said that these emails “raised awkward questions”.

Higgins said that prior to sending the letter to the FCA in 2019, he had a picture of a “diminution of the relationship” between the two men since Staley had left JPMorgan, where he was an executive in the private bank and Epstein was a client.

He said that subsequent revelations had painted “a different picture”.

“I was told in interview with the FCA (…) that in October 2015, Mr Staley was in email and telephone contact with Mr Epstein. I was not aware of that at the time the response to the FCA’s question was being drafted. I did not ask Mr Staley the date of his last contact with Mr Epstein,” Higgins also said in his witness statement.

“Had my colleagues at Barclays and I been aware of all of the information of which I am now aware, I am sure that we would have questioned Mr Staley about that further information in depth.”

The FCA said in 2023 that it intended to ban Staley from senior roles. Staley resigned in 2021 over the investigation’s preliminary findings and has been battling to clear his name since.

Epstein, who socialized with Wall Street titans, royalty and celebrities including Britain’s Prince Andrew, died in 2019 while in jail on sex trafficking charges.

(Reporting by Iain Withers and Stefania Spezzati; additional reporting by Sam Tobin; Editing by Angus MacSwan)