LONDON (Reuters) - Ex-Barclays boss Jes Staley said on Tuesday he had no idea about serial paedophile Jeffrey Epstein's "monstrous activities", as he gave evidence to try to overturn a finance industry ban over his relationship with the late financier.

Staley began his second day in the witness box at his appeal against a proposed ban and 1.8 million-pound ($2.3 million) fine from the Financial Conduct Authority (FCA), saying he had no idea of sex trafficking allegations against Epstein.

The 68-year-old is fighting the ban at London's Upper Tribunal in a case that reveals details of Barclays' ( JJCTF ) handling of the FCA probe into Staley, who left the British bank in 2021 under a cloud caused by the regulatory action.

Staley's effort to clear his name also sheds light on his ties with Epstein, whose 2019 arrest for sex trafficking minors and subsequent death in custody brought scrutiny on the financier's other high-profile associates.

Epstein's crimes have also prompted lawsuits against JPMorgan, where Staley was head of the private bank and had Epstein as a major client, and public figures including Britain's Prince Andrew as well as against Staley.

'MONSTROUS ACTIVITIES'

The FCA's lawyer Leigh-Ann Mulcahy asked Staley on Tuesday about Epstein's 2008 conviction for soliciting a minor for prostitution, for which Epstein was briefly jailed and after which Staley visited him while Epstein was on work release.

Staley said in his witness statement that he understood Epstein had "engaged with a prostitute who, it transpired, was underage".

"This appeared to me, and I believe a number of people I knew, to have been an isolated transgression," he added.

In the witness box, he said: "If I was aware of his monstrous activities, I would not have maintained a relationship."

Staley was asked about an email Epstein sent to Staley and three others on the day he was released from prison in 2009, to which Staley replied: "I toast your courage!!!!!"

Mulcahy asked: "You clearly felt that Mr Epstein had been courageous - can I ask you why?"

Staley responded: "He was indicted, he was prosecuted and he served time in jail and work release at home and I was loyal to him. And obviously any time in prison is a tough time."

Staley's appeal centres on a 2019 letter sent by Barclays Chair Nigel Higgins to the FCA, which approached the British bank shortly after Epstein's arrest prompted press interest.

The FCA says the letter contained two misleading statements: that Staley "did not have a close relationship" with Epstein and their last contact was "well before he joined Barclays ( JJCTF ) in 2015".

Staley, however, says both statements were accurate and that the pair had only a "close professional relationship".

Barclays Chair Higgins said in his witness statement that, after speaking to Staley about his relationship with Epstein, he thought it did not need a board discussion.

But, Higgins added, emails between the pair that were disclosed by Staley's former employer JP Morgan, painted "a different picture".

Staley is expected to be in the witness box for the rest of the week, with closing arguments to be made in April.