Today: 19-04-2024

Legal Storm: Barclays Faces Lawsuit Over Former CEO's Connections to Jeffrey Epstein

In a legal development, Barclays is facing a lawsuit from investors in its U.S.-listed securities, who allege that the British bank provided misleading information about former Chief Executive Jes Staley's connections to the disgraced financier Jeffrey Epstein. Filed as a proposed class action in a Los Angeles federal court, the lawsuit contends that Barclays was aware, or should have been aware, of a much closer relationship between Staley and Epstein, potentially involving knowledge of the financier's sex crimes, than what was publicly disclosed.

Jes Staley served as Barclays' chief executive from 2015 to 2021 and had a prior association with Epstein during his tenure at JPMorgan Chase. Investors claim that Barclays concealed or issued misleading statements regarding Staley's and Epstein's relationship in public statements, regulatory disclosures, and communications with the Financial Conduct Authority in the UK. The investors argue that the revelation of the truth led to a decline in the price of their American Depositary Receipts (ADRs), notably on October 12 when British regulators barred Staley from senior banking roles and fined him £1.8 million ($2.2 million).

The lawsuit, seeking unspecified damages for ADR investors, covers the period from July 22, 2019, when a New York Times article first discussed Epstein's association with Staley, through October 12, 2023. Barclays has refrained from commenting on the matter, and there has been no immediate response from lawyers representing Staley.

Notably, Staley and Barclays Chief Executive C.S. Venkatakrishnan are named as defendants in the lawsuit. The legal action against Barclays follows JPMorgan's agreement in June to pay $290 million to settle a proposed class action by Epstein's abuse victims and a $75 million settlement in September for a lawsuit by the U.S. Virgin Islands, where Epstein owned property. JPMorgan had also reached a confidential settlement with Staley in September to cover its losses in both lawsuits. A hearing on November 9 in Manhattan federal court is scheduled to consider the final approval of the settlement with Epstein's abuse victims. The case against Barclays is identified as Merritt v Barclays Plc et al, U.S. District Court, Central District of California, No. 23-09217.

In conclusion, Barclays finds itself embroiled in a legal quagmire as investors in its U.S.-listed securities pursue a class-action lawsuit, alleging that the bank misled them about former CEO Jes Staley's connections to Jeffrey Epstein. The lawsuit contends that Barclays was aware of a closer relationship between Staley and the disgraced financier than publicly acknowledged, potentially involving knowledge of Epstein's illicit activities. As the legal battle unfolds, the allegations center on Barclays concealing or making misleading statements in various forums, including public statements, regulatory disclosures, and communications with the UK's Financial Conduct Authority.

The timeline of the lawsuit spans from July 22, 2019, when media reports first highlighted the association between Staley and Epstein, to October 12, 2023. The investors claim that the revelation of the truth resulted in a decline in the value of their American Depositary Receipts (ADRs), particularly on October 12 when British regulators took action against Staley.

Barclays, while declining to comment, faces legal proceedings with Staley and current CEO C.S. Venkatakrishnan as defendants. This legal challenge follows similar actions against JPMorgan, which agreed to substantial settlements related to Epstein's abuse victims and lawsuits by the U.S. Virgin Islands. Additionally, JPMorgan reached a confidential settlement with Staley in September to cover losses in both lawsuits.

As the case against Barclays progresses, it adds another chapter to the broader legal fallout stemming from Epstein's activities, highlighting the financial and reputational risks financial institutions face when their executives are linked to individuals involved in criminal activities. The outcome of this lawsuit may further shape discussions around corporate responsibility and transparency in disclosing executive ties, underscoring the far-reaching consequences for institutions navigating the intersection of finance, legality, and public trust.