“10. In August 2019, following various media reports, the Authority contacted a member of Barclays Board requesting a written assurance that the Board had informed itself and was comfortable regarding any association of Mr Staley or Barclays with Mr Epstein. 11. Barclays through its senior executives, engaged in discussions with Mr Staley regarding the response to be made. It was originally intended that Mr Staley would provide a letter which Barclays would send to the Authority, but it was decided, after discussion, including with Mr Staley’s own legal adviser, that Barclays should send the response instead. 12. On8 October 2019 , in response to the enquiry by the Authority, Barclays sent a letter (which will be referred to throughout this Statement of Case as “the Letter”) which contained two inaccurate and misleading statements: firstly, about the nature of Mr Staley’s relationship with Mr Epstein (stating “[Mr Staley] has confirmed to us that he did not have a close relationship with Mr Epstein”) and secondly, about the recency of the last contact between Mr Staley and Mr Epstein (stating that “[Mr Staley’s] last contact with Mr Epstein was well before he joined Barclays in 2015.”) 13. Mr Staley reviewed a near final draft of the proposed Letter which contained those two statements. He was expressly asked to confirm that the language was fair and accurate. Mr Staley confirmed he was comfortable with the language and in doing so recklessly approved its content. 14.The two statements were material to the Authority’s enquiry, which sought to ascertain whether, in light of media reports, Barclays had informed itself and was comfortable regarding any association of Mr Staley and Barclays with Mr Epstein. The enquiry made by the Authority necessarily involved consideration of the media reports and the relationship between Mr Staley and Mr Epstein. The enquiry was not limited to a concern about whether Mr Staley was involved in or witnessed the conduct which was the subject of the allegations against Mr Epstein set out in the media reports but extended to the association between Mr Staley and Mr Epstein more generally and what Barclays had done to satisfy itself in this regard. In any event, statements as to the nature of the relationship and recency of contact were themselves relevant to whether Mr Staley was involved in or witnessed the conduct alleged on the part of Mr Epstein. 15.Mr Staley must have appreciated because it was obvious (and the Authority contends, he did so appreciate) that the Authority would rely on the content of the Letter, in circumstances including that the Authority had made a specific enquiry of Barclays and required the provision of a written response, Mr Staley held a very important role as CEO of one of the UK’s most significant financial institutions and the fact of his association with Mr Epstein inevitably raised questions about his conduct and judgment. 16. Further, Mr Staley must have been aware (and, the Authority contends, was so aware) that there was a risk that the Letter would mislead the Authority by inaccurately stating the nature of the relationship and the recency of the contact between them. 17. The conduct in allowing the misleading statements to be made to the Authority also constituted a failure to be open and transparent with the Authority and to make appropriate disclosure. 18. Such conduct was in breach of ICR 1, ICR 3 and/or SMCR 4. 19. The proposed financial penalty and prohibition order are appropriate sanctions and are proportionate to Mr Staley’s failings, taking account of all relevant circumstances.”
“(i) The Authority’s decision-making process to commence a formal investigation was not conducted fairly and impartially. The Authority made its decision without giving either the Applicant or Barclays an opportunity to provide the Authority with an explanation of the circumstances in which the letter was approved. On the facts available to the Authority at the time of its decision, it would have been reasonable and proportionate to have done so. The material so far disclosed by the Authority suggests that the PRA and the Authority concluded that the letter which was sent by Barclays to the Authority on8 October 2019 (“the letter”) was factually incorrect and misleading based on email correspondence supplied to the Authority by JP Morgan Chase (“JPM”) on22 November 2019 and3 December 2019 , in circumstances which have not so far been disclosed to the Applicant. Any reasonable decision maker, acting in all the circumstances which the Authority was presented with, would have offered the Applicant and Barclays the opportunity to provide an initial explanation of any apparent inconsistency between the email correspondence and the terms in which the letter was expressed. The Authority failed to provide the Applicant with any opportunity to clarify the circumstances in which the letter had been approved, prior to the decision to formally commence the investigation. Instead, the PRA and the Authority prejudged the issue of the Applicant’s culpability and then directed that an investigation should be commenced. Their process was unfair and disproportionate. (ii) Once the facts had been established by the appointed Investigators and the investigation concluded, the Authority’s decision could not have reasonably resulted in the conclusion that the Applicant had been responsible for material misconduct. The Authority’s decision to issue the Notice that is the subject of the Reference was grossly disproportionate and paid no proper regard to the evidence relating to the circumstances in which the Applicant approved the draft of the letter. (iii) The Applicant is not proved to have acted recklessly in approving the draft of the letter of8 October 2019 and / or in failing to take steps to correct what are alleged to be factual inaccuracies in its content. He is not proved to have acted in contravention of any of the Conduct Rules.”
“(i) ….[ Named] senior executives and board members knew the history of the relationship and they had been informed by the Applicant on a number of occasions that the Applicant had had a professional, fairly close relationship with Mr Epstein and that he had had no contact with Mr Epstein since joining Barclays in December 2015. It follows that it is irrational for the Authority to assert that the Applicant was aware of a risk that the letter might mislead the Authority. (ii) An issue which the Authority should have addressed, but has not, is why the letter was drafted in these terms when Mr Hoyt, who was responsible for the drafting, and Mr Higgins, who was responsible for approving the draft and sending this information to the Authority, were both aware that the Applicant had consistently informed Barclays first, that he had had a professional, fairly close relationship with Mr Epstein and second, that he had had no contact with Mr Epstein since joining Barclays. The Applicant’s case is that the answer to that question lies in the nature of the enquiry made by the Authority on 15 August and the perception that Mr Hoyt and Mr Higgins had and shared in relation to its scope and purpose, namely that its limited purpose was to assure the Authority that the Applicant had neither been aware of nor involved in Mr Epstein’s unlawful activities. That was the reputational issue for the Bank and the Authority, and was answered by the letter, as the last paragraph thereof demonstrated. It reads as follows: “In sum, neither our discussions with Jes nor our review of the bank’s records have revealed any cause to suspect that Barclays or Jes have played any role in the activities of Mr Epstein that have been under investigation.” “In sum, neither our discussions with Jes nor our review of the bank’s records have revealed any cause to suspect that Barclays or Jes have played any role in the activities of Mr Epstein that have been under investigation.”
“It would be incorrect to characterise the Applicant’s interactions with Mr Epstein over a period of 15 years, as the Authority has done, as that of “a personal friendship, albeit predicated on a business connection”
“4.5 Mr Staley’s consistent instructions to Barclays, provided by him to its senior executives and two board members, were that his relationship with Mr Epstein had been at times “professionally fairly close” and that the last occasion he had met with Mr Epstein was in April 2015 when he and his wife had visited Mr Epstein on his island, for no more than two or three hours while they were sailing in the Caribbean, and that he had had no contact with Mr Epstein since his appointment as CEO of Barclays in December 2015. This information was accurate and by15 August 2019 was already in the public domain. 4.6 Those senior executives and board members at Barclays who were engaged in preparing the response to the Bowdoin College and the Authority’s enquiry therefore knew that Mr Staley’s relationship with Mr Epstein had been described by him as “professionally fairly close”, that it had not been one of personal friendship and that Mr Staley’s last meeting with Mr Epstein had been in April 2015 when he had visited Mr Epstein’s island in the company of his wife while sailing in the US Virgin Islands. They were also aware that Mr Staley’s repeated position was that he had had no contact with Mr Epstein since joining Barclays on1 December 2015 .”
“7. If any party considers that there are any persons (“potential witnesses”) in addition to those for whom statements of fact have been served pursuant to Directions [4] & [5] above whose evidence would be of substantial assistance to the Tribunal in its determination of the reference, it shall notify the other party by13 September 2024 of (i) the identity of those potential witnesses, (ii) the reasons why the potential witness would be of substantial assistance in the Tribunal’s determination of the reference(s), (iii) any efforts made by the relevant party to adduce a witness statement from each of the potential witnesses, (iv) the reasons why the relevant party has been unable to adduce a witness statement from each of the potential witnesses, and (v) any order or directions sought in respect of the potential witness. 8. If any party has notified the other party in accordance with Direction [7] above, there should then be a hearing as soon as possible for the Tribunal to consider whether, and if so what, further directions are required in relation to the potential witnesses identified. Skeleton arguments are to be exchanged a week before any such hearing.”
“The Tribunal may consider any evidence relating to the subject matter of the reference or appeal, whether or not it was available to the decision-maker at the material time.”
“201. The FCA’s secondary case comes closest to an appropriate test, namely that “matter” encompasses anything which arises from the same factual situation which gave rise to the regulatory action in the statutory notice referred to the Tribunal or is otherwise connected with the circumstances, the evidence and/or the allegations, whether factual or legal, which were before the FCA’s decision-maker, but is in my view still too narrow. 202. What is clear is that there must be some sufficient relationship between the matter referred and the decision which triggers the right to refer, and the critical question is: what is required by the concept of sufficiency in this context? The answer is to be found in the fact that the decision is a stage in the regulatory process, and the Tribunal reference a further stage in that process. The logical answer is therefore that something is sufficiently related to the decision which triggers the reference to amount to or be included in “the matter” if it has a real and significant connection with the subject matter of the process, in the sense of its procedural or substantive content, which has culminated in the decision notice or supervisory notice. Such connection must be real and significant, not fanciful or tenuous. But if so, that is sufficient. It need not be something upon which the FCA has specifically relied during the process, provided that it has a real and significant connection with the subject matter of the process. What is required when the FCA seeks to rely on something new in the Tribunal is an examination of what is new, and of the procedural or substantive content of the process culminating in the decision or supervisory notice, and the establishment of a real and significant connection between them. If what is new has this connection it is within the Tribunal’s jurisdiction. It is a separate question whether the FCA should be permitted to rely upon it in any particular case, which is a matter for the exercise of the Tribunal’s case management powers as to whether it would be just and fair.” 203. If it be objected that this is not hard-edged, I would respond that it is undesirable to seek to define it more prescriptively because it must be flexible enough to take account of over 300 types of decisions, set out in DEPP Chapter 2 Annexes 1 and 2, which may give rise to a reference to the Upper Tribunal. However, it is consciously and deliberately a very wide gateway, for the reasons I have discussed. Accordingly, I would expect it to be a rare and obvious case which fell outside it so as not to come within the Tribunal’s jurisdiction.”
“It is to be noted that the general jurisdiction of the Upper Tribunal may be narrowed in any individual case either by the parties, or by the Upper Tribunal itself exercising its case management powers. It may be narrowed by the firm in framing the issues in its reference notice or reply. It may be narrowed by the FCA in framing its statement of case. It may be narrowed by the Upper Tribunal exercising its powers in Rule 5(3)(c) to require the respondent to amend its statement of case to remove allegations which it would not be in accordance with the overriding objective to permit it to pursue; or the applicant to amend the reply on similar grounds. It was common ground between the parties that this would allow it not merely to refuse amendments as a matter of discretion, but to impose deletions for the same discretionary reasons. By this means the Upper Tribunal's jurisdiction contains a wide discretion to refuse to allow the FCA to pursue allegations in the reference if it would not be fair and just to allow it to do so, notwithstanding that they fell within its gateway jurisdiction of "the matter" referred. Defining the scope of that gateway jurisdiction is not, therefore, the only means of limiting the scope of what the Upper Tribunal may decide upon, or even the primary means of so limiting it: whatever the scope of the gateway jurisdiction, the Upper Tribunal retains the ability to restrict it by reference to what is just and fair in relation to each individual case applying its powers flexibly.”
“162A The Authority’s position is that Mr Staley has not been candid with the Authority in his interview to the extent that his answers are misleading and that he has filed a Reply in these proceedings that is misleading, or at risk of being misleading in material respects, and that he has done so dishonestly or recklessly. 162C Mr Staley’s Reply in these Upper Tribunal proceedings is dated21 August 2023 , shortly after he was deposed on10 June 2023 in the US Proceedings on matters relating to his involvement with Mr Epstein, including his contact with Mr Epstein via his daughter after he had joined Barclays. He must therefore have been aware the Reply was misleading in material respects. 162D The Authority considers the following assertions in the Reply are misleading on the basis of answers given in the deposition by Mr Staley and/or on the basis of the Epstein Estate emails: i. The assertion in the Reply at paragraph 3.28 that “personal interaction extended to occasional dining invitations to Mr Epstein’s home in New York and on other isolated occasions at other venues, at which many well connected persons were often present.”
“. ……. The claimant does not have to plead primary facts which are only consistent with dishonesty. The correct test is whether or not, on the basis of the primary facts pleaded, an inference of dishonesty is more likely than one of innocence or negligence. As Lord Millett put it, there must be some fact “which tilts the balance and justifies an inference of dishonesty”
“Therefore, whilst it might be understandable why Mr Hussein behaved the way he did, we cannot excuse it. It is a very serious matter not to be candid and truthful with one’s regulator and equally serious, if not more so, to give untruthful evidence under oath to a Tribunal. Those are failings that we cannot ignore and go right to the heart of whether a person wishing to work in the financial services industry can be relied on to act honestly and with integrity.”
“…we cannot see that there is any basis on which we could properly ask the Authority to reconsider its decision to make a prohibition order against Mr Hussein. It cannot be said that in the light of the circumstances, the decision to prohibit is one that is not reasonably open to the Authority to make”
“ 72F Between 2008 and 2011, Mr Staley shared confidential information relating to his then employer, JPM with Mr Epstein showing the closeness of their relationship and Mr Staley’s willingness to breach obligations owed to his employer including where there was a conflict of interest between JPM and Mr Epstein:…”
“45. On multiple occasions, Staley shared with Epstein confidential information about transactions the Bank was structuring or exploring” 46. Staley discussed the confidential status of other Bank clients with Epstein. 47. Staley shared information protected by the attorney-client privilege about Epstein’s ongoing litigation against JPMC with Epstein. JPMC Ex. 104. … 49. Staley kept Epstein informed about the status of the Bank’s investigation into the allegations against him in March 2011.”
“64B There are a number of emails in the 2009-2011 period which the Authority considers are inconsistent with a business or professional relationship of any type. The Authority’s view is that emails of this nature would not be exchanged between or in relation to individuals who were anything other than close friends. Several emails in 2009 and 2010 show Mr Epstein sending Mr Staley photographs of women and Mr Staley responding to some of those emails, and Mr Epstein and Mr Staley exchanging other types of emails which are described in the JPMC Statement of Undisputed Material Facts and Counterstatement of Additional Material Facts filed in US Proceedings under the heading “Staley exchanged Suggestive Emails with Epstein About Women.”
“162B The Authority has sought an explanation as to why Mr Staley’s Reply was misleading, and none has been provided: i. Correspondence sent by the Authority on9 May 2024 noted that “in August 2023 Mr Staley approved his Reply in these proceedings containing numerous assertions that he had had no contact with Mr Epstein since joining Barclays in December 2015. He did so in circumstances where he must have known that such assertions were inaccurate, having provided his Deposition in the US Proceedings during which he was questioned about the emails set out...above (and other matters) only two months previously.” ii. Mr Staley’s legal representatives responded to the9 May 2024 correspondence on17 May 2024 noting that “the Authority makes criticism of the Applicant which is unreasonable and unsupported by the law. The Applicant has not failed to comply with any legal obligation”, but not including any explanation as to why that was considered to be the case. iii. Correspondence sent by the Authority on24 May 2024 noted that “Mr Staley is obliged to help the Upper Tribunal to further the overriding objective of dealing with cases fairly and justly. By filing a Reply which Mr Staley must have known was misleading in material respects and refusing to assist by producing documents which he knows undermine his case, Mr Staley is clearly in breach of that obligation. iv. Mr Staley’s legal representatives responded to the24 May 2024 correspondence on30 May 2024 , but omitted to address the question clearly posed by the Authority as to the misleading nature of the Reply. v. Correspondence sent by the Authority on26 June 2024 noted the “continued failure to address, let alone explain or apologise for the fact that your client has submitted a Reply which he must have known was material in misleading respects.” vi. Mr Staley’s legal representatives responded to the26 June 2024 correspondence on2 July 2024 , and again omitted to address the question clearly posed by the Authority as to the misleading nature of the Reply.”