According to The New York Times, Staley was Epstein's "chief defender" at J.P. Morgan, helping Epstein maintain accounts at the firm amid internal concerns that Epstein was using the accounts for illicit activities. The Wall Street Journal reported that Staley traveled to Little St. James, Epstein's private island in the Caribbean, in 2009. In January 2023, it was reported that Staley was named in a lawsuit by a victim of Epstein against JP Morgan which alleged that JP Morgan had enabled Epstein's behavior. The suit alleged Staley knew Epstein was trafficking women and that he personally witnessed Epstein abusing an underage girl. In September 2025, US congressman Thomas Massie claimed during a House hearing featuring testimony from FBI Director Kash Patel that Staley was on a list of at least 20 prominent men that Epstein had sex trafficked young women and girls to, and that this list was in FBI possession.

On March 3, 2025, Staley appealed a UK financial industry ban over his ties to Epstein, accused of approving a misleading letter about their relationship. Staley denies the allegations, claiming unfair treatment in Britain's Financial Conduct Authority (FCA) decision.

Staley was eventually banned from taking any job in the UK’s financial sector for playing down those ties.