LONDON, March 12 (Reuters) - Former Barclays

boss Jes Staley had sex with a member of serial paedophile

Jeffrey Epstein's staff, the banker told a court on the third

day of his evidence as he appeals against a proposed financial

services ban.

Britain's Financial Conduct Authority said in 2023 that it

would ban Staley and fine him 1.8 million pounds ($2.3 million)

for allegedly misleading the watchdog over his relationship with

Epstein. He is giving evidence at London's Upper Tribunal this

week.

The 68-year-old, who said on Tuesday that he had no idea

about the late financier Epstein's "monstrous activities", was

asked by the FCA's lawyer about evidence Staley had given in a

lawsuit against him by his previous employer JPMorgan ( JPM ).

JPMorgan ( JPM ), where Staley was previously head of the private

bank and had Epstein as a client, was sued by the U.S. Virgin

Islands for allegedly ignoring Epstein's sex trafficking, with

the bank in turn suing Staley before the case was settled.

In the U.S. litigation, Staley was asked about having "had

sexual intercourse with a woman ... at Mr Epstein's brother's

apartment" in New York, the FCA's lawyer Leigh-Ann Mulcahy said.

Staley said he was introduced to the woman by Jeffrey

Epstein, the encounter was consensual and that "she was a part

of his staff as I recall".

The FCA also referred to the fact Epstein had asked Staley

to be trustee of his estate as evidence of their close

relationship. Staley said: "I turned him down."

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 brought scrutiny on the

financier's other high-profile associates.

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 says both statements were accurate.

The FCA has cited a cache of over 1,000 emails between

Staley and Epstein, in which Staley described their friendship

as "profound" and referred to Epstein as "family".

In one previously-reported email chain from 2010, Staley

told Epstein: "That was fun. Say hi to Snow White." When Epstein

asked "what character would you like next", Staley replied:

"Beauty and the Beast."

Staley said he had no recollection of those emails, after

which Mulcahy said: "They are not emails that are consistent

with a purely personal relationship ... they were personal in

nature, weren't they?"

Staley replied: "I do not recall those emails." His evidence

is expected to conclude on Friday.