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JPMorgan’s Epstein Problems Continue Despite a $290 million Settlement

According to the terms of a proposed settlement reached, JPMorgan Chase & Co. would pay up to $290 million to Jeffrey Epstein’s victims of sex trafficking. The bank’s reckoning over a connection it now says it regrets dearly will not stop with this settlement, though.

According to a person familiar with the wording who didn’t want to be identified because the full terms aren’t yet public, this is a significant settlement and unusual in that it effectively holds JPMorgan accountable for the crimes of a client, even though the bank won’t admit or deny liability as part of the settlement. Banks are frequently penalized for failing to take sufficient precautions to guarantee they don’t conduct business with shady clients or for having inadequate measures in place to prevent money laundering, but it is incredibly uncommon for any to be penalized for drug trafficking, terrorism, or other crimes committed by bad actors.

According to the New York Times, if the US District Court in New York approves the US bank’s settlement, it will go to possibly more than 100 victims in a class action lawsuit headed by an unnamed Jane Doe. It’s nearly four times as much as the $75 million that Deutsche Bank AG agreed to pay to resolve a related lawsuit.

According to investigators and victims, JPMorgan had a 15-year client connection with Epstein in comparison to Deutsche Bank’s 5-year relationship, and this relationship spanned the years of some of Epstein’s worst activities. There are still unidentified participants in the Deutsche Bank deal.

According to estimates from Elliott Stein of Bloomberg Intelligence, the amount is about double what JPMorgan was anticipated to pay in total to settle both this case and another one that the US Virgin Islands, where Epstein lived for many years, filed against the bank. The second lawsuit descended into a bloody brawl after JPMorgan countersued the territory, alleging that officials there assisted Epstein in several ways, including by providing him with substantial tax incentives and with no oversight despite being a registered sex offender. The US Virgin Islands’ attorney general told Bloomberg News that the territory will continue to fight the bank, although JPMorgan declined to comment on the situation.

Jes Staley, who was close to Epstein and once oversaw JPMorgan’s asset management unit and investment bank, is also being sued by JPMorgan. After leaving in 2013, Staley rose to the position of UK’s Barclays Plc’s chief executive officer. He left that position in 2021 when UK officials found that he had not been as forthcoming about his contact with Epstein while working for the US bank as he ought to have been. Staley has previously refuted claims that she knew of Epstein’s sexual offenses.

The chairman and CEO of the US bank, Jamie Dimon, has frequently apologized to Epstein’s victims and said how the bank regrets ever doing business with him, although always maintained JPMorgan had done nothing wrong. The bank stated in a statement that it would never have been doing business with Epstein if it had thought he was using the bank to facilitate horrible acts.

But given the evidence that implies JPMorgan could have taken greater action to address the concerns of certain top workers, the lawsuit has progressed this far and the settlement is this substantial. This isn’t a typical instance of a “know your customer” error or insufficient procedures for money laundering. Evidence in the lawsuits and in a deposition of Dimon that was made public this month mentioned many warning signs that may have caused the bank to cut off Epstein earlier or take more action to investigate the questionable financial activity.

According to the evidence, Stephen Cutler, the bank’s top attorney at the time, repeatedly wrote other senior staff members in July 2011 to advise them that Epstein shouldn’t be a client. In the same year, Epstein was given permission by the bank to withdraw $20,000 to $40,000 in cash each month. There may have been other warning signs as well.

After the legal fights are complete, JPMorgan will have to defend its decisions, explain why it didn’t move more quickly at the time, and detail the steps it has taken to enhance its procedures in the ten years after it terminated Epstein’s client relationship with it to its investors and other stakeholders. During his deposition, Dimon was questioned by attorneys who made him a pledge that he would keep them informed about future efforts to combat sex trafficking. In a statement, plaintiffs’ attorney Sigrid McCawley claimed that the settlements demonstrated that “financial institutions have a significant part to play in spotting and closing down sex trafficking.”

JPMorgan is currently still involved in its high-stakes legal battles with Staley and the USVI. If these disputes proceed to court and further evidence is made public, all three parties stand to lose far more when it comes to their reputations and financial standing.

In the most crucial area, JPMorgan is acting ethically by giving actual money to assist in compensating women who were victimized by Epstein’s crimes. But there is still more work to be done to truly put this matter behind it. 

The original article is posted on JPMorgan’s Epstein Troubles Don’t End With $290 Million Settlement (fa-mag.com)