Investors have lodged a securities class action lawsuit against Barclays (LON:BARC), its ex-CEO Jes Staley, and other executives on November 1, 2023. The lawsuit alleges that there was investor deception over Staley's undisclosed ties with convicted sex trafficker Jeffrey Epstein during his tenure at both JP Morgan Chase (NYSE:JPM) Bank and Barclays.
The UK Financial Conduct Authority (FCA) had previously imposed a ban and a £1.8 million fine on Staley for recklessly approving a misleading letter about his connection with Epstein to the FCA and Barclays board. The lawsuit emphasizes the enduring repercussions of the Epstein scandal on the financial sector.
The Los Angeles federal court lawsuit claims that Staley deceived investors and that Barclays concealed or distorted this relationship in public announcements, risk disclosures, and interactions with the FCA. The lawsuit demands damages for the period from July 22, 2019 – when the Staley-Epstein relationship was publicly revealed – through October 12, 2023. Defendants in this lawsuit include Staley and current Barclays CEO C.S. Venkatakrishnan.
As a result of these allegations, Barclays' American Depositary Receipts' value has seen a four-fold drop. Staley's tenure at Barclays from 2015 to 2021 was marred by these controversies.
In related matters, JPMorgan, Staley's former employer, paid $290 million to Epstein’s victims, and $75 million to the US Virgin Islands, and reached a confidential settlement with Staley. These payments further highlight the lasting impact of the Epstein scandal on major financial institutions.
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