The Bank of England governor, Andrew Bailey, was accused by the Barclays chair of having “destroyed” Jes Staley, a court heard on Friday, after the City watchdog led by Bailey at the time launched an investigation into the banker’s ties to the convicted sex offender Jeffrey Epstein.
Nigel Higgins, who made the accusations and is still the Barclays chair, also asked in 2019 whether the Financial Conduct Authority (FCA) would be willing to drop its investigation if Staley resigned.
“We discussed whether there was a way for Mr Staley to step down from his position in order to avoid the investigation, which may have had some attraction for Barclays and Mr Staley,” Bailey said in a witness statement.
However, he told Higgins it would be “impossible” to ignore a cache of emails from JP Morgan, which included a notorious exchange discussing Disney princess characters.
“I explained that there was no way that we could avoid asking Mr Staley about the “Snow White” email,” Bailey, who was then running the FCA, said. “Given that this was suggestive of a closer relationship, it was impossible that we could just ignore them.”
In those messages from 2010, Staley contacted Epstein, saying “say hi to Snow White”. Epstein replied “what character would you like next?”, to which Staley answered “Beauty and the Beast”.
The court was shown notes taken by Higgins after a call with Bailey, in which the former is said to have declared “you have destroyed him,” in an apparent reference to Staley. “I don’t see any evidence of a lack of integrity,” the note adds.
“I do remember a conversation along those lines, yes,” Bailey told the court.
The conversations with Higgins were detailed in witness evidence, as Bailey took the stand at the upper tribunal.
Bailey, who wore a dark suit and purple tie, was sat metres from Staley as he was cross-examined by Robert Smith KC, who is trying to overturn an FCA decision in 2023 to ban Staley from senior roles in the UK financial sector.
That decision, which also cost Staley £18m in pay and bonuses at Barclays, came after an FCA investigation found he had misled the regulator after a Barclays letter from October 2019 said Epstein and Staley “did not have a close relationship”.
Staley resigned in 2021 over the investigation’s preliminary findings, which were formally released in 2023.
Staley’s lawyers are arguing that members of the bank’s board had been briefed on the extent of his ties with the late financier.
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Epstein died in prison in August 2019 while awaiting trial on charges of trafficking underage girls for sex.
Bailey’s cross-examination involved poring over notes from calls and meetings held with Higgins in December 2019, days after the FCA launched its investigation.
The FCA says it triggered an investigation after JP Morgan – Staley’s former employer – shared a cache of more than 1,200 emails between Epstein and Staley that allegedly proved the pair were “indeed close” had a relationship that “went beyond one that was professional in nature”.
The regulator says this is illustrated by the fact that Epstein messaged Staley about sex, women and foreign holidays, and worked behind the scenes to bolster Staley’s career by liaising with government officials, business leaders and royalty.
The hearing, which began on Monday, is due to continue until at least 14 March, and Higgins and Staley are due to take the stand next week.
Source: www.theguardian.com