On 26 June 2025, the Upper Tribunal upheld the Financial Conduct Authority's ("FCA") decision to prohibit ex-Barclays CEO James (Jes) Staley from performing any senior management or significant influence function in relation to any regulated person pursuant to s56 of the Financial Services and Markets Act 2000 ("FSMA"). This is based on the FCA's finding that Mr Staley had recklessly and with a lack of integrity approved a letter (the "Letter") being sent to the FCA containing misleading statements as to the nature of his relationship with Jeffrey Epstein and the time they were last in contact (the "Statements"). For details as to the background of the FCA's Decision Notice, please refer to our article: Examining the FCA's Decision Notice against James Staley.
The Tribunal found that:
- the Statements were significant to the determination of the fitness and propriety of Mr Staley and were material to the FCA;
- the Statements were inaccurate on an objective basis;
- Mr Staley knew the Statements were inaccurate; and
- Mr Staley was aware of the risk that the FCA might be misled by the Statements and it was unreasonable for him to take the risk.
The Tribunal therefore concluded that Mr Staley acted recklessly in approving the Letter and agreed with the FCA that Mr Staley had failed to act with integrity (Individual Conduct Rule ('ICR') 1), was not open and cooperative with the regulators (ICR 3) and failed to disclose information in respect of which the regulators would reasonably expect notice (Senior Manager Conduct Rule 4).
The Tribunal found that a prohibition order is a course of action reasonably open to the FCA and imposed a fine of £1.1 million, a reduction from the £1.8 million imposed by the FCA, taking into account the reduction for benefit from Barclays which will no longer be received by Mr Staley.
Comment
This decision highlights the importance of senior executives being open and transparent with the regulator. This extends to an individual's personal relationships, particularly when the personal relationships are closely intertwined with one's professional function. As the FCA pointed out in its submission, the provision of accurate, complete and frank information by senior managers to the FCA is a major consideration for the regulator in determining whether an individual carrying out controlled functions is fit and proper. Failure to answer questions asked by the FCA in a fully transparent manner can lead to serious consequences.
One oddity of the Upper Tribunal decision is a statement by Judge Herrington that in answering the FCA's queries, "Mr Staley faced a difficult dilemma; either he disclosed to Barclays the true nature and extent of his relationship with Mr Epstein, which would be likely to result in an investigation by the Authority and a risk to his career with Barclays, or he could take the risk that the Authority would be misled by the Statements which he approved in the Letter."
Whilst the FCA might be legitimately interested in whether the Bank faced exposure from Mr Staley's connections to Mr Epstein (including for example whether there was any possibility of Mr Staley having to resign) the possibility of the FCA launching an investigation, on the basis of an admitted friendship with Mr Epstein, does seem somewhat remote. It is unclear what exactly they would be investigating and on what basis.