JPMorgan Chase claimed to the UK financial regulator that it had evidence indicating former Barclays chief executive Jes Staley was involved in criminality related to sex offender Jeffrey Epstein’s convictions, a London court was told.
The revelation highlights how Staley’s downfall at the helm of one of Britain’s biggest banks was triggered by the actions of the largest Wall Street lender, his former employer.
Staley had a high-flying 30-year career at JPMorgan but he later fell out badly with the US bank led by Jamie Dimon.
JPMorgan offered in 2019 to hand over a cache of more than 1,200 emails between Staley and Epstein allegedly undermining assurances Barclays made in a letter that year to the UK regulator. The letter said that the relationship between the two men was “not close”.
Mark Steward, former head of enforcement at the FCA, told a tribunal on Friday that JPMorgan had alleged to the watchdog that the documents it was offering “indicated involvement of Mr Staley in criminal activity related to Mr Epstein’s trafficking convictions”.
Steward did not ultimately agree with JPMorgan’s assessment, according to his witness statement.
He told the court he was aware that the FCA “does not make the case in these proceedings that Mr Staley was involved in or aware of the criminal activities of Mr Epstein and it does not ask the tribunal to infer that he was based on these documents”.
His evidence came on the fifth day of an appeal where Staley is trying to overturn a ban and fine by the FCA for “recklessly” allowing Barclays to mislead the regulator over the nature of his relationship with one of the worst sexual predators in recent memory.
Andrew Bailey, who was the FCA boss at the time and is now governor of the Bank of England, also gave evidence on Friday.
He wrote in his accompanying witness statement that an FCA official informed him in 2019 that JPMorgan had said it had “found documents suggesting some potential impropriety in the relationship between Mr Staley and Mr Epstein”.
The central bank governor said the US bank made an “unusual request” for the FCA to compel it to hand over documents relating to Staley’s relationship with Epstein.
The content of the documents “was concerning as it suggested that Mr Staley may have misled Barclays and thereby misled the authority”, Bailey wrote in his witness statement.
Epstein was found dead in a prison cell in 2019 while awaiting trial on charges of trafficking underage women. Epstein previously pleaded guilty to procuring a minor for prostitution in 2008.
“There was such a disjunction . . . between the key sentence in the letter about the relationship and the evidence that we had received from JPMorgan . . . the investigation was going to have to get to the bottom of this,” Bailey said when asked by the FCA’s barrister Leigh-Ann Mulcahy KC about his response to the evidence provided by the US bank.
The documents provided by JPMorgan also included a spreadsheet showing two payments by Epstein to “a woman whose identity has been redacted”, Steward told the court earlier.
JPMorgan told the FCA that the payments were made on January 8, 2009, and August 31, 2009, and the US bank “considered there may be a connection” between the payments and specific emails between Staley and Epstein, he added.
One email discussed a visit by Staley to Epstein’s office in Palm Beach in January 2009. In another email exchange in August 2009, Epstein asked Staley if he needed anything while in London and he replied “yep”.
Staley’s lawyer said that her client declined to comment on what the US bank told the FCA. JPMorgan also declined to comment.
JPMorgan sued Staley, claiming he misled the bank by internally vouching for the late sex offender, and the two reached a confidential settlement in 2023.
After Staley joined Barclays in 2015, he poached so many former senior executives from JPMorgan that it created bad blood between the two institutions. Dimon called the then Barclays chair, John McFarlane, to complain about the defections, the Financial Times previously reported.
Defectors from JPMorgan to Barclays included CS Venkatakrishnan, who was hired as the British bank’s chief risk officer and took over as CEO after Staley quit in 2021.