UT (Tax & Chancery) UT-2023-000064 - [2025] UKUT 00203 (TCC)

We have found at [450] that it is self-evident that the Statements were significant to the fitness and propriety of Mr Staley and so were material to the Authority. We have also found that the Statements were misleading. We have also found that Mr Staley knew that the Statements were inaccurate. We turn now to the question as to whether Mr Staley appreciated the risk that if he permitted the Letter including the Statements to be sent there was a risk that the Authority would be misled by its contents.

As the Tribunal found in Batra v Financial Conduct Authority [2014] UKUT 0214 (TCC) at [15], quoted at [38] above, the Tribunal gave the following example of recklessness in relation to the making of statements:

“One example of a lack of integrity not involving dishonesty is recklessness as to the truth of statements made to others who will or may rely on them or wilful disregard of information contradicting the truth of such statements.”

As the Authority submitted, there is a clear and obvious disconnect between the facts of the relationship (of which Mr Staley was aware) and the language of the Letter.

The Statement that “Jes has confirmed to us that he did not have a close relationship with Mr. Epstein” was at direct odds with Mr Staley’s knowledge that it was a close relationship (even on his own case that it was a “very close professional relationship” and that he saw Mr Epstein as a “friend”).

The statement that “Mr Staley’s last contact with Mr Epstein was well before he joined Barclays in 2015” on its face conveyed the impression that a considerable period of time had passed between the last interaction between Mr Staley and Mr Epstein prior to Mr Staley’s appointment as Chief Executive on 28 October 2015 (and his subsequent commencement in post on 1 December 2015). Our findings of fact demonstrate that was not the case, as Mr Staley knew. He gave Mr Hoyt and Mr Higgins the impression that his last contact with Mr Epstein was in April 2015.

We have rejected Mr Staley’s submissions that the context of the Authority’s enquiry meant that he did not believe that the Statements were inaccurate. We have found that Mr Staley was aware that the Statements were inaccurate.

As we observed at [43] above, in making our finding as to the state of knowledge of Mr Staley as to the risk, the Tribunal is entitled to have regard to inherent probabilities and how a reasonable professional would respond in the relevant situation and enabling the Tribunal to conclude, if appropriate, that the risks concerned would have been obvious to Mr Staley, such that an inference can be drawn as to such awareness.

In our view, a reasonable professional who found himself in the circumstances of Mr Staley would have appreciated the importance of ensuring that any statements made to his regulator in response to such an important enquiry were fair and accurate. Mr Staley had had previous experience of the enforcement process at the Authority resulting in a finding against him and he would therefore have appreciated the need to be fully cooperative and open with the Authority on such matters. It would have been expected that a reasonable person in Mr Staley’s position would have thought carefully about whether the Statements were an accurate representation of the true position regarding his relationship with Mr Epstein and the last time he had contact with him. In any event, Mr Staley accepted in his cross-examination that what was said in the Letter was what he had confirmed to Mr Higgins, Mr Hoyt and Mr Gillies and that if it was not fair and accurate he was required to say so.

Mr Staley himself denies that he was aware of the risk that the Authority would be misled by the Statements. We therefore have to determine this issue by drawing inferences from the circumstances in which Mr Staley found himself. In our view, the inherent probabilities, Mr Staley having been aware that the Statements were inaccurate, demonstrate that it was obvious to Mr Staley that the Authority would have been misled by the Statements. In our view, the statements would give the Authority the impression that there had never been a close relationship between him and Mr Epstein and that such contact as there had been between the two men had ceased well before he joined Barclays. In those circumstances, Mr Staley would have been aware, bearing in mind that the Letter indicated that the Statements were made after explanations had been given by Mr Staley to Barclays about the nature of the relationship and the recency of contact, that the Authority would be likely to accept those representations at face value and not undertake any further investigation.

Mr Staley would also have been aware that had there been a fully accurate description of the nature of the relationship and the frequency of contact between the two men, including the fact that it continued to the point just before Mr Staley’s appointment and included discussing with Mr Epstein the possibility of his appointment, then it is likely that the Authority would have made further enquiries and possibly opened an investigation. In our view, that would have been the case even if the initial enquiry had been as narrow as Mr Staley suggested. That is because the Authority may well have considered in the light of the relationship between the two men having been close, that they would need to enquire further into whether the circumstances of that relationship gave Mr Staley the opportunity of learning about Mr Epstein’s criminal misconduct. We are fortified in that view by the fact that both Mr Hoyt and Mr Higgins said that they would have taken a different approach to the Letter had they known the facts that subsequently came to their attention during the course of the Authority’s investigation.

We put no weight on Mr Staley’s assertion that he believed that the wording of Statement 1 was accurate because the “close relationship” language was linked to what he believed was the scope of the enquiry, namely whether he was aware of Mr Epstein’s misconduct.

To reiterate, Statement 1 was in the following terms:

“Jes has confirmed to us that he did not have a close relationship with Mr. Epstein, and he is resolute that at no time did he see anything that would have suggested or revealed any aspect of the conduct that has been the subject of recent allegations.”

Mr Staley’s point was that the “close relationship” language is qualified by the rest of the sentence, that is it was not a relationship that was such that he became aware of Mr Epstein’s misconduct.

We reject that interpretation of Statement 1 and in our view no reasonable professional could have believed that interpretation to be correct. The two parts of the sentence deal with two distinct points, as demonstrated by the comma before “and”.

In these circumstances, it is not credible that Mr Staley did not think that the Letter would mislead the Authority. In our view it was obvious to him that there was a risk that it would.