A U.S. judge has allowed a shareholder lawsuit to proceed against Barclays and former CEO Jes Staley because they allegedly deceived investors about their connection to convicted sex offender Jeffrey Epstein.
The U.S. District Judge Maame Ewusi-Mensah Frimpong allowed American depositary receipt holders to continue their claims against Barclays and Staley for their alleged attempts to hide damaging information to protect their reputation and stock value. The alleged deception occurred between July 2019 when Epstein was arrested and October 2023.
The investors claim Barclays failed to disclose Staley’s personal connections to Epstein through internal evidence that included emails where Staley called Epstein “family.” The bank issued public statements that described their relationship as strictly professional while it first told investors that U.K. regulators investigated only Staley’s knowledge of Epstein’s criminal activities rather than his involvement.
The court reduced two of the claims against Barclays Chairman Nigel Higgins but preserved the main fraud allegations. The case is led by pension funds operating in New York and St. Louis.
Staley departed from Barclays in 2021 after his time at JPMorgan Chase where he maintained connections with Epstein. The U.K. court rejected his appeal to avoid a financial industry ban after he was found to have misled regulators. Staley denies any knowledge of Epstein’s criminal activities and claims to have no memory of the incriminating emails.
