JPMorgan reaches settlement with Epstein’s victims

JPMorgan Chase reached a tentative settlement Monday with victims of sexual abuse of Jeffrey Epstein, the late financier, after weeks of embarrassing revelations about the bank’s long-standing relationship with him, the bank and the victims’ lawyers said.

The proposed deal would settle a lawsuit filed last November in Manhattan federal court by an unidentified woman on behalf of victims who were sexually assaulted by Mr Epstein over a period of about 15 years when they were teenage girls and young women, the lawsuit said. . The number of victims can reach more than 100.

In the statement, the bank and the victims’ lawyers said they had reached “an agreement in principle to settle the lawsuit on behalf of the victims” and that the “settlement is in the best interests of all parties, especially the survivors who are the victims of the crime.” appalling abuse of Epstein.” The statement did not specify a settlement amount.

The settlement deal was reached about two weeks after Jamie Dimon, the CEO of JPMorgan and one of Wall Street’s best-known bankers, issued a day-long statement saying he had barely heard from Mr. Epstein before the financier’s arrest in July 2019 on federal sex trafficking charges.

Mr Epstein committed suicide in August 2019 in a Manhattan prison cell, a month after his arrest.

JPMorgan is still facing a related lawsuit from the US Virgin Islands government. That lawsuit remains the largest open Epstein-related case after years of civil litigation against Mr. Epstein’s estate and Ghislaine Maxwell’s 2021 conviction in Manhattan federal court for aiding Mr. Epstein in sex trafficking.

The lawsuit filed by the victims accused JPMorgan of ignoring repeated warnings that Mr Epstein had trafficked teenage girls and young women for sex, even after registering as a sex offender and pleading guilty in a 2008 Florida case for the soliciting prostitution from a teenage girl. . The complaint said the bank overlooked red flags in Mr Epstein’s business because it valued him as a wealthy client who had access to dozens of even wealthier people.

Court documents and testimony reviewed by The New York Times revealed that bank employees had filed numerous suspicious activity reports about Mr. Epstein’s repeated large cash withdrawals. The legal documents showed that after designating Mr Epstein as a “high-risk client” in 2006, the bank retained him as a client despite media reports detailing allegations of his sexual abuse of teenage girls and evidence that some of the cash withdrawals for payments were. to dozens of young women.

JPMorgan had provided banking services to Mr. Epstein from about 1998 to 2013 — a period when federal authorities and victims have said one of the worst acts of conduct was committed by the financier, who had palatial homes in Manhattan, Florida, the U.S. Virgin Islands, New Mexico and Paris.

The bank had said on a number of occasions before the deal was reached that it was not helping Mr Epstein commit “his heinous crimes” and “in hindsight any association with him was a mistake”.

In a separate lawsuit, the same attorneys for Mr. Epstein’s victims last month negotiated a $75 million preliminary settlement with Deutsche Bank, which succeeded JPMorgan as Mr. Epstein’s primary banker. Deutsche, which ended its relationship with Mr Epstein at the end of 2018, paid a $150 million fine to New York regulators in 2020 over allegations it failed to adequately monitor its financial dealings with the disgraced financier, among other failings in the compliance.

The settlements with both banks must be approved by Manhattan Federal District Court Judge Jed Rakoff. Judge Rakoff is also presiding over the related lawsuit brought by the government of the US Virgin Islands.

The Virgin Islands, the US territory in the Caribbean, is demanding that JPMorgan pay it damages for enabling Mr. Epstein to set up a sex trafficking operation at his private island residence off St. Thomas. But JPMorgan has bitterly opposed the lawsuit in court documents, arguing that government officials there interacted with Mr. Epstein for nearly two decades.

Two of Mr. Epstein’s companies received lucrative US territory tax breaks worth tens of millions of dollars. Shortly after JPMorgan ended its relationship with Mr. Epstein, the Virgin Islands approved a first-of-its-kind boutique banking license for Mr. Epstein.

Judge Rakoff had moved the lawsuits against JPMorgan into a slew of momentum, with more than a dozen statements made in the past three months, including those from Mr. Dimon and another from Albert Bryan Jr., the Governor of the Virgin Islands. The deal between JPMorgan and Mr. Epstein’s victims came about when some of the plaintiffs’ attorneys took the testimony of James E. Staley, the former director of JPMorgan who had close ties to Mr. Epstein.

In lawsuits, the Virgin Islands alleged that Mr. Epstein and Mr. Staley shared sexually suggestive emails about young women.

Mr Staley, better known as Jes, has repeatedly denied in court documents that he did anything wrong or was aware that Mr Epstein had sexually assaulted young women and teenage girls. JPMorgan subsequently sued Mr. Staley to ensure that, if it is found that he has engaged in improper activities, he may be held liable for the damages that the bank ultimately pays.

The victims’ attorneys most involved in litigating and negotiating the proposed settlements with the two banks included David Boies, Sigrid McCawley, Brad Edwards and Brittany Henderson.

Mr. Boies said of the proposed settlement with JPMorgan: “It’s been a long time, too long, but today is a great day for the survivors of Jeffrey Epstein.” Ms McCawley, who argued before Judge Rakoff that the JPMorgan lawsuit should be treated as a class action, said “the settlements indicate that financial institutions play an important role in detecting and stopping sex trafficking.”

In court documents related to the proposed settlement with Deutsche Bank, the victims’ lawyers said they expect compensation of up to 30 percent. The attorneys will likely file a similar claim for damages in the JPMorgan lawsuit. Any request for compensation must be approved by Judge Rakoff.

In the settlement with Deutsche Bank, the victims are each entitled to a refund of between $75,000 and $5 million, according to court filings.

The settlements with the two banks will add to the utter relief Mr Epstein’s many victims have received over the years. Mr Epstein’s estate has paid out approximately $150 million in restitution to more than 125 victims — many of whom may be eligible for additional compensation from the deals with Deutsche and JPMorgan.