UT (Tax & Chancery) UT-2023-000064 - [2024] UKUT 00394 (TCC)

The Authority’s original Statement of Case contained a summary at [10] to [19] as follows:

“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.

On 8 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.”

The Authority has not sought to amend this summary of its case.

The Statement of Case set out alleged facts in great detail at [46] to [100] concerning Mr Staley’s relationship with Mr Epstein during the period between 1999 and the announcement of Mr Staley’s appointment as CEO by Barclays on 28 October 2015.

At [101] to [114] the Authority pleads alleged facts relating to press enquiries to Barclays and statements made by Barclays in 2015 about the relationship between Mr Staley and Mr Epstein. At [114] the Authority originally pleaded that as far as it was aware, Mr Staley had no contact with Mr Epstein after 25October 2015.

At [115] to [116] the Authority pleads alleged facts concerning media reports following Mr Epstein’s arrest in July 2019, in particular press articles regarding Mr Staley’s visit in January 2009 to Mr Epstein when Mr Epstein was on work release during his prison sentence, a large transaction Mr Epstein was alleged to have introduced to JPM via Mr Staley and Mr Staley’s visit to Mr Epstein’s Island in the US Virgin Islands in April 2015.

At [117] to [124] the Statement of Case deals with the Authority’s request for information in August 2019.

Paragraphs [135] to [162] deal with (i) the drafting of the Letter, (ii) Mr Staley’s involvement in the process, (iii) the discussion between Mr Staley and a member of Barclays Board on 4 October 2019, (iv) the call that took place on 4 October 2019 between the Authority and Mr Higgins, (v) the approval of the draft Letter by Mr Staley, (vi) the Letter itself and (vii) why The Authority regarded statements in the Letter to be misleading. In particular, the Authority pleaded that Mr Staley was in contact with Mr Epstein up to and during October 2015.

It should be emphasised that it is no part of the Authority’s case that Mr Staley was either involved in any of the serious acts of sexual misconduct attributed to Mr Epstein or that he committed similar acts himself. Nor does the Authority allege that Mr Staley was aware of such misconduct on the part of Mr Epstein. As is clear from the summary of the Authority’s case, as set out at [10] to [20] of its Statement of Case, as set out at [17] above, the Authority’s case relates purely to what it says were misleading statements made in the Letter with Mr Staley’s approval regarding the closeness of Mr Staley’s relationship with Mr Epstein, and the recency of his contact with him.