Barclays was sued this week by investors in its U.S.-listed securities who said the British bank misled them about former Chief Executive Jes Staley’s ties to the disgraced financier Jeffrey Epstein.
The proposed class action filed in Los Angeles federal court said Barclays knew or should have known that Staley had a much closer relationship with Epstein, including possible awareness of the financier’s sex crimes, than it publicly acknowledged.
Staley was Barclays’ chief executive from 2015 and 2021. He was previously a top banker at JPMorgan Chase, where he also had a close relationship with Epstein.
The investors said Barclays concealed or made misleading statements about Staley’s and Epstein’s relationship in public statements, regulatory disclosures about risks it faced, and communications with Britain’s Financial Conduct Authority.
Investors said the price of their American Depositary Receipts fell four times as the truth emerged, including on Oct. 12 when British regulators banned Staley from senior banking roles and fined him 1.8 million pounds (US$2.2 million).
Epstein was arrested on July 6, 2019, on federal sex trafficking charges, and killed himself in a Manhattan jail cell five weeks later.
The lawsuit seeks unspecified damages for ADR investors from July 22, 2019, when a New York Times article discussed Epstein’s relationship with Staley, through Oct. 12, 2023.
Barclays declined to comment on Friday. Lawyers for Staley did not immediately respond to requests for comment. Staley and Barclays Chief Executive C.S. Venkatakrishnan are among the other defendants.
JPMorgan agreed in June to pay $290 million to settle a proposed class action by Epstein’s abuse victims, and in September to pay $75 million to settle a lawsuit by the U.S. Virgin Islands, where Epstein had a home.
In September, JPMorgan reached a confidential settlement with Staley, who it had sued to cover its losses in both lawsuits.
A Nov. 9 hearing is scheduled in Manhattan federal court to consider final approval of the victims’ settlement.
The case is Merritt v Barclays Plc et al, U.S. District Court, Central District of California, No. 23-09217.