JPMorgan chase settles $290M lawsuit with Epstein victims

Source: Yahoo Finance

JPMorgan Chase (JPM) reached a tentative $290 million settlement with victims of Jeffrey Epstein, one of two lawsuits alleging the nation's largest bank ignored warnings about its longtime client and facilitated his alleged sex trafficking.

The deal came roughly two weeks after JPMorgan CEO Jamie Dimon was asked by lawyers what he knew about the bank's dealings with Epstein. One of Dimon's former top deputies, Jes Staley, was also questioned under oath last weekend.

The case at issue was filed in November of last year by a woman who is listed anonymously as Jane Doe in court papers. She said she was sexually abused by Epstein and that Epstein paid her and other victims with money housed at JPMorgan. The suit sought class-action status on behalf of hundreds of alleged victims.

The bank agreed to pay $290 million, but the terms of the settlement still have to be approved by a Manhattan federal judge. There was no admission of liability by JPMorgan as part of the agreement.

"We all now understand that Epstein’s behavior was monstrous, and we believe this settlement is in the best interest of all parties, especially the survivors, who suffered unimaginable abuse at the hands of this man," a bank spokesman said.

Lawyer David Boies, who represented the victims, said “Taken together or individually, the historic recoveries from the banks who provided financial services to Jeffrey Epstein speak for themselves. It has taken a long time, too long, but today is a great day for Jeffrey Epstein survivors and a great day for justice.”

Boies said "The bank has asked us not to reveal the number" of victims covered by this settlement "at this time and that pending further discussions we are going to respect that request."

The deal doesn't eliminate all JPMorgan legal headaches associated with Epstein. JPMorgan is still being sued by the government of the US Virgin Islands, which also claimed JPMorgan facilitated Epstein's sex trafficking.

The bank also is suing Staley, who got to know Epstein while running JPMorgan’s asset-management unit. JPMorgan claims Staley misled the bank's executives about Epstein. Staley’s lawyers have denied the allegations and Staley has said he never knew about Epstein’s alleged crimes.

Deutsche Bank agreed to pay $75 million to settle a lawsuit with Epstein's victims last month. The bank took Epstein as a client in 2013 after JPMorgan tossed him out.

Epstein, who pleaded guilty in 2008 to soliciting a minor for prostitution, was arrested in 2019 on child sex trafficking charges. He was later found dead in prison in an apparent suicide.

The announcement of a new JPMorgan settlement comes weeks after Dimon faced a series of questions about what he knew about Epstein while the convicted sex predator was a longtime customer of the bank.

During a May 26 deposition conducted at JPMorgan's headquarters in Manhattan, Dimon said repeatedly that he never met Epstein or talked to him. He also said he had no memory of being told anything about him by any of his executives.

In fact, he said he was not aware of a 2011 email from one of his top deputies advising that Epstein "should not be a client" of the bank.

The email, according to a lawyer who conducted the deposition, was sent by JPMorgan general counsel Stephen Cutler to two other executives who reported directly to Dimon: asset management head Mary Erdoes and Staley.

"This is not an honorable person in any way," Cutler wrote in the July 20, 2011 message, according to the lawyer conducting the deposition. "He should not be a client."

Dimon said he wasn’t aware of the message "at the time" but "I know it today."

On Friday, a plaintiff’s lawyer asked the case’s presiding judge to grant a follow-up deposition of Dimon. In a letter to the court, the lawyer said a document from the bank produced after Dimon's May 26 deposition was “one of the most relevant and responsive documents produced to date.”

It included a timeline of electronic communications that cited e-mails between Staley and Epstein.

These late-produced documents, according to the June 9 letter to the judge from the plaintiff's lawyer, demonstrate that JPMorgan "was fully capable of learning the full extent of Epstein and Staley’s personal relationship" and "yet waited to do so until 2019 despite the myriad red flags and public reports about Epstein’s conduct over the years."

A bank spokesman said Monday of Epstein, "Any association with him was a mistake and we regret it. We would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes."