JPMorgan Chase may review records from Manhattan prosecutors related to litigation over its decision to retain Jeffrey Epstein as a client, a New York judge ruled Friday, including any potential sexual abuse claims involving former executive Jes Staley.
The US lender first subpoenaed the Manhattan District Attorney’s Office earlier this month, requesting any statements made by “anyone identifying James ‘Jes’ Staley as an alleged witness or alleged perpetrator of sexual assault, d sexual abuse or other sex-related crimes.”
The bank sued Staley, seeking to hold him liable for damages it may have to pay in two cases brought against JPMorgan by an accuser of Epstein and the US Virgin Islands, where the late sex offender once had a home. . The accuser’s case alleges that Staley raped her and saw her being abused by Epstein. Staley strongly denied the allegations, calling them “libelous.”
The order from Judge Jed Rakoff, who is overseeing cases in Manhattan federal court, came hours after JPMorgan chief executive Jamie Dimon was set to begin answering questions under oath about his knowledge of Epstein’s crimes. , while the legal judgment on the bank’s decision to withhold it. as a client rose to the highest echelons of Wall Street.
The sworn testimony, which the largest lender in the United States had tried to prevent, marks a significant escalation in two high-profile cases over JPMorgan’s 15-year relationship with Epstein, which has embarrassed some current and former executives and has cast an unflattering light on the bank’s internal compliance processes. The deposition will take place behind closed doors and is expected to last up to two days.
Dimon’s name has already appeared in the contentious litigation, with the lawsuits against JPMorgan being filed late last year. It was referenced in an internal email expressing concerns about Epstein, containing the words “pending Dimon review”.
Mary Erdoes, a senior JPMorgan executive, told lawyers in a sworn deposition in March that Dimon was solely responsible for overseeing Staley, who was at the bank for decades and for a time managed the relationship with Epstein, according to people familiar with the matter. . JPMorgan’s lawsuit against Staley alleges he misled the bank about Epstein’s wrongdoings.
In a statement, JPMorgan said its boss had never met Epstein, “talked to him, [or] emailed him and was not involved in any decision regarding his account.” The bank added: “The plaintiffs know this based on decades of discovery and millions of emails. . . yet they persist in seeking publicity.
Still, the cases remain one of the few blots on the longtime executive’s notebook. He recently announced a nearly $16 billion spending spree at JPMorgan, spearheaded efforts to lobby Wall Street for a US debt ceiling deal to stave off a default. payment, and recovered First Republic, a defaulting lender, in a government-run auction. .
JPMorgan first took on Epstein as a client in 1998 and continued to fund him until 2013.
Dimon is expected to testify that he had no knowledge of the multiple internal red flags raised about Epstein’s accounts. Nonetheless, the cases raised broader questions about the strength of the bank’s controls.
“It’s actually not good news if Dimon didn’t know about it,” said a person familiar with the bank’s organizational structure. “If no one has ever contacted him for about a decade to continue banking [Epstein] when they learned of his conduct and it was made public, that is perhaps worse news.
JPMorgan called Epstein’s scheme “monstrous” and expressed regret at having him as a client. “In hindsight, any association with [Epstein] was a mistake. . . but we did not help him commit his heinous crimes.
Deutsche Bank last week settled separate Epstein-related claims for $75 million, which will be shared among dozens of women.
The stakes for JPMorgan could soon be even higher. As Dimon is deposed on Friday, a federal judge in New York will hear arguments from representatives of Epstein’s accusers, who argue that dozens, if not hundreds of women should be entitled to compensation from the bank, that they accuse of profiting from traffic.
On the eve of Dimon’s deposition, JPMorgan hit back in the US Virgin Islands, alleging in court papers that officials in the territory turned a blind eye to Epstein’s crimes and even issued visas to some of his victims.
“Epstein could have lived anywhere in the world. He chose USVI,” JPMorgan’s attorneys said. “They protected him and even rewarded him, granting him [millions of dollars] in tax incentives. . . looking away as he walked through USVI airports accompanied by girls and young women.
In response, the U.S. Virgin Islands Attorney General’s office said the charges were “a clear attempt to deflect blame away from JPMorgan Chase, which had a legal responsibility to report evidence in its possession of human trafficking from Epstein, and didn’t.” .
Epstein pleaded guilty in 2008 to a state charge in Florida of soliciting a minor for prostitution. More than a decade later, he was charged by federal prosecutors with sex trafficking and died by suicide in prison in 2019 while awaiting trial.
