The Barclays chair Nigel Higgins’s assurances that Jes Staley had “no particular relationship” with Jeffrey Epstein, days after the child sex offender’s death in 2019, convinced the City regulator that there was no reason to investigate the bank’s chief executive, a court has heard.
Jonathan Davidson, a former director of the Financial Conduct Authority (FCA), made the comments during a hearing of Staley’s legal challenge against the UK regulator on Wednesday.
Staley is trying to overturn its 2023 decision to ban him from taking senior roles in the UK’s financial sector, after allegedly misleading the regulator over the depth of his relationship with Epstein, who died in prison on 10 August 2019 while awaiting trial on charges of trafficking underage girls for sex.
Davidson, who was in charge of supervising high street banks such as Barclays, told the upper tribunal in London on Wednesday that he held a call with Higgins on 15 August 2019, after noting that media reports detailing Epstein’s ties to Staley were “intensifying”.
He said Higgins assured the FCA there “wasn’t any particular relationship” between the two men. Davidson asked Higgins to consider the stories in the press and asked that Barclays respond to the FCA in writing, but said the assurances received left him with the feeling that “there was no sense of urgency”.
“The understanding that I was given by what Mr Higgins said was that there was no need to investigate it, and understand the relationship in detail, because that relationship was not particularly close. It was not a close relationship,” Davidson said.
“If I had been told by Mr Higgins that the relationship had been close I would have said that there would be a need for further inquiries,” Davidson added.
Barclays eventually sent a letter to the FCA in October 2019, which stated that Staley “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”.
However, a cache of more than 1,200 emails and messages from Staley’s former employer JP Morgan (JPM) raised further concerns at the FCA. “It appeared to me that the communications provided by JPM indicated that Mr Staley and Mr Epstein had a very different type of relationship to the one described by Barclays,” Davidson’s witness statement said.
His statement added: “There was a reasonable suspicion that serious misconduct may have been committed … on the basis that he had acted dishonestly and without integrity by giving false information to Barclays about the nature of his relationship with Mr Epstein and that, accordingly, he may not be a fit and proper person to perform controlled functions.
“Given his position as CEO of Barclays, this was obviously an extremely serious matter.”
The FCA eventually launched a formal investigation – named “Operation Downey” – in December 2019. Staley resigned in 2021 over the investigation’s preliminary findings, which were formally released in 2023.
Its investigation is alleged to have discovered that Staley was in contact with Epstein in the days leading up to his appointment in 2015, and that the pair had a close personal relationship, illustrated by the fact that Epstein messaged Staley about sex, women and foreign holidays, and worked behind the scenes to bolster Staley’s career by liaising with government officials, business leaders and royalty.
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The FCA is also alleging that the pair used Staley’s eldest daughter, Alexa, as an intermediary to stay in contact until at least February 2017.
Staley’s former chief of staff, Sasha Wiggins, said in a witness statement that she had been “aware that Alexa got on well with Mr Epstein because they both had a scientific background”, but that Staley was insistent he would not have let his family interact with Epstein if he believed he was a child sex offender.
“Mr Staley said to me once: ‘Why would I have introduced my wife and daughters to Mr Epstein if I thought he was a paedophile?’” Wiggins said.
She said Staley also gave the impression that he and Epstein were not close friends, telling her on numerous occasions that he never invited Epstein to his home or “milestone birthdays”.
Wiggins said that, while Staley was “effusive” in communications with business contacts, “from what I recall, Jes didn’t have very many friends”, and could “probably count them on the fingers of one hand”.
The hearing continues.
