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Former FCA chief executive Bailey gives evidence at

Staley's

appeal

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Staley facing financial services ban, $2.3 million fine

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Ex-Barclays ( JJCTF ) CEO denies misleading financial watchdog

By Sam Tobin

LONDON, March 7 (Reuters) - Bank of England Governor

Andrew Bailey said emails between ex-Barclays ( JJCTF ) boss Jes Staley

and Jeffrey Epstein "raised awkward questions" in a witness

statement made public on Friday, as he gave evidence at Staley's

appeal against an industry ban.

Bailey arrived at the Rolls Building in London to answer

questions on his role in the decision by the Financial Conduct

Authority, while he was its chief executive, to open an

investigation over Staley's past association with Epstein, who

was arrested in 2019 following allegations he was involved in

sex trafficking young women and teenage girls for more than two

decades.

Staley is challenging the FCA's decision to ban him from

working in the UK finance industry indefinitely and fine him 1.8

million pounds ($2.3 million) at London's Upper Tribunal.

He sat in court flanked by his lawyers as Bailey recounted

his interactions with Barclays Chair Nigel Higgins,

shortly after the FCA approached the bank following Epstein's

arrest in 2019.

Barclays ( JJCTF ) sent a letter from Higgins in response, which said

Staley "did not have a close relationship" with Epstein and

their last contact was "well before he joined Barclays ( JJCTF ) in 2015".

The FCA alleges those statements were inaccurate and that

Staley recklessly approved the letter, though Staley says both

statements are correct.

Bailey said in his witness statement that, when he received

the letter, he thought Barclays ( JJCTF ) had looked into the issue and

the FCA did not need to take any further action.

He added, however, that JPMorgan ( JPM ) - where Staley was

previously head of the private bank and had Epstein as a major

client - then contacted the FCA saying they had "found documents

suggesting some potential impropriety".

'AWKWARD QUESTIONS'

The FCA's case centres on a cache of over 1,000 emails

between Staley and Epstein, including those from JPMorgan ( JPM ) in

which Staley described their friendship as "profound".

The emails also feature previously reported references to

some of Epstein's other well-known associates, such as Britain's

Prince Andrew, Peter Mandelson, now British ambassador in

Washington and Microsoft ( MSFT ) founder Bill Gates.

Bailey said in his statement that emails between Staley and

Epstein suggested they had a close relationship and that Staley

"may have misled Barclays ( JJCTF ) and thereby misled the (FCA)".

There was subsequently a meeting attended by Bailey,

Higgins, then Bank of England Governor Mark Carney and Sam Woods

from the BoE's Prudential Regulation Authority about the letter.

"We ... were concerned about the process Barclays ( JJCTF ) had been

through to get this answer," he said in his statement. "This

raised awkward questions for Barclays ( JJCTF ) and in particular for Mr

Higgins, since he had put his name to the letter."

Higgins is due to give evidence on Monday. Staley, 68, will

from Tuesday be cross-examined over his relationship with

Epstein, whose 2019 arrest and subsequent death in custody

brought scrutiny on his many high-profile associates.

Epstein's crimes have also prompted lawsuits against

JPMorgan ( JPM ) and public figures like Britain's Prince Andrew as well

as against Staley himself, leading to a steady stream of

communications between Staley and Epstein being made public.