Ex-Barclays CEO Must Face Investor Suit Over Epstein Ties (3)

Former Barclays PLC CEO Jes Staley must defend against proposed investor class accusations that he fraudulently downplayed his relationship with pedophile Jeffrey Epstein, a federal judge ruled.

And investors sufficiently alleged Barclays and chairman Nigel Higgins knowingly released or approved plausibly misleading statements about the extent of that relationship, given the bank’s investigation into Staley and Epstein’s correspondence, to sustain their securities fraud suit, Judge Maame Ewusi-Mensah Frimpong said in an order entered on Wednesday.

The US District Court for the Central District of California judge denied the former banking executive’s motion to dismiss shareholder allegations and only partially granted Barclays and Higgins’ separate motion to toss the lawsuit.

As chairman, it logically made sense that Higgins approved board statements, and thus the judge declined to toss certain allegations against him. But his declination to comment on Staley’s departure from Barclays wasn’t adequately pleaded to be misleading, Frimpong said, tossing that claim.

The US court ruling landed as Staley lost his legal battle to overturn his ban from UK finance for minimizing to officials his relationship with the deceased financier. A London judge on Thursday sided with the British Financial Conduct Authority, although reduced Staley’s fine from £1.8 million to £1.1. million.

Epstein Ties

Staley was Barclays CEO from 2015 to 2021, when he left after facing criticism over his ties to Epstein, who died by suicide in federal jail in 2019 after he was arrested on sex trafficking and conspiracy charges.

On Oct. 12, 2023, the UK’s FCA issued a final decision in its investigation into the Epstein ties, finding Staley had “recklessly approved” a 2019 letter from Barclays containing misleading statements about his relationship and their last point of contact. The FCA fined Staley and barred him from holding a senior management position in financial services.

Barclays’ American Depositary Receipts and London share prices declined by almost 5% and more than 3.1% respectively that day.

The investors’ most recent complaint sufficiently alleged a 2019 Barclays spokesperson quote in a New York Times article, press releases in 2020 and 2021, and an annual report for 2019 contained potentially misleading statements about Staley and Epstein’s professional versus personal relationship, Frimpong said. The ex-CEO’s contention on a 2020 conference call about the timing of cutting contact with Epstein was also plausibly alleged as misleading, she said.

The defendants in the US court case downplayed Staley’s Epstein relationship, resulting in investor losses when information about the friendship came to light over time, according to that complaint, which was filed by Teamsters Local 237 Additional Security Benefit Fund and Teamsters Local 237 Supplemental Fund for Housing Authority Employees, and the Firemen’s Retirement System of St. Louis.

Frimpong’s order said the complaint insufficiently pled a theory of dishonest delay by Barclays under a UK law involving the letter to the FCA, but left room to re-plead.

Their proposed class would include those who got Barclays’ ADRs traded on the New York Stock Exchange or got ordinary shares traded on the London Stock Exchange from July 22, 2019, through Oct. 12, 2023, the year investors sued.

Barclays declined to comment in an email.

Robbins Geller Rudman & Dowd LLP, which declined to comment in an email, is lead counsel for the lead plaintiff.

Williams & Connolly LLP represents Staley. His attorneys didn’t immediately respond to an email seeking comment. Skadden, Arps, Slate, Meagher & Flom LLP represents Barclays and Higgins.

The case is Merritt v. Barclays PLC, C.D. Cal., No. 2:23-cv-09217, 6/25/25.