JPMorgan Chase can study statements that will have been made to Manhattan prosecutors by a lady suing the financial institution over its resolution to retain Jeffrey Epstein as a shopper, a New York choose dominated on Friday.
The US lender first subpoenaed the Manhattan district legal professional’s workplace earlier this month, requesting any statements made by an unnamed Epstein accuser to its intercourse crimes unit in August.
The accuser, who makes use of the pseudonym Jane Doe, has alleged that JPMorgan needs to be accountable for damages over her sexual abuse by the hands of Epstein, and by Jes Staley, a former senior govt on the financial institution. Staley has strongly denied the allegations, calling them “slanderous”.
The financial institution sued Staley in March, arguing that he needs to be compelled to shoulder the price of any payouts in reference to the instances introduced in opposition to JPMorgan by the Epstein accuser and the US Virgin Islands, the place the late intercourse offender as soon as had a house.
In addition to searching for paperwork referring to Jane Doe, JPMorgan had requested the Manhattan DA for information of statements made by any “particular person figuring out [Staley] as an alleged witness or an alleged perpetrator of any sexual assault, sexual abuse, or different sex-related crimes”.
Choose Jed Rakoff, who’s overseeing the instances in Manhattan federal courtroom, mentioned JPMorgan may entry the information in query, which he later clarified associated solely to these sought in reference to Jane Doe’s statements.
The order got here as JPMorgan chief govt Jamie Dimon was answering questions underneath oath about his information of Epstein’s crimes.
The sworn testimony, which the US’s largest lender had tried to forestall from taking place, marked a major escalation within the two high-profile instances over JPMorgan’s 15-year relationship with Epstein, which have embarrassed some present and former executives and shone an unflattering gentle on the financial institution’s inside compliance processes.
Dimon’s title had already come up within the contentious litigation, with the lawsuits in opposition to JPMorgan having been filed in the direction of the top of final 12 months. He was referenced in an inside e-mail expressing considerations about Epstein, containing the phrases “pending Dimon assessment”.
Mary Erdoes, a prime JPMorgan govt, informed legal professionals in a sworn deposition in March that Dimon was solely answerable for supervising Staley, who was on the financial institution for many years and for a interval managed the connection with Epstein, based on folks acquainted with the matter. JPMorgan’s lawsuit in opposition to Staley alleges he misled the financial institution about Epstein’s misdeeds.
In a press release, JPMorgan mentioned its boss had by no means met with Epstein, “spoke with him, [or] emailed with him, and was not concerned in any choices about his account”. The financial institution added: “The plaintiffs know this based mostly on a long time of discovery and tens of millions of emails . . . but they persist in pursuit of publicity.”
But the instances stay one of many few blots on the copy e-book of the longtime govt. He just lately introduced an virtually $16bn spending spree at JPMorgan, has been on the forefront of Wall Avenue’s lobbying efforts for a deal on the US debt ceiling to keep away from default, and scooped up First Republic, a failed lender, in a government-led public sale.
The litigation has additionally raised questions extra usually in regards to the robustness of the financial institution’s controls throughout his tenure.
“It’s really not excellent news if Dimon didn’t know,” an individual acquainted with the financial institution’s organisational construction mentioned. “If no one ever reached out to him in roughly a decade of continuous to financial institution [Epstein] once they knew of his conduct and when it was public, that’s even perhaps worse information.”
JPMorgan has referred to as Epstein’s scheme “monstrous” and expressed remorse for having him as a shopper. “In hindsight, any affiliation with [Epstein] was a mistake . . . however we didn’t assist him commit his heinous crimes.”
Final week, Deutsche Financial institution settled separate Epstein-related claims for $75mn, which might be shared amongst dozens of girls.
The stakes for JPMorgan may quickly be even larger. Whereas Dimon was being deposed on Friday, a federal choose in New York heard arguments from representatives of the Epstein accuser, who contend that doubtlessly a whole lot of girls needs to be entitled to compensation from the financial institution, which they accuse of benefiting from human trafficking.
Sigrid McCawley, a lawyer for Jane Doe, informed the courtroom that there was “clear proof within the report that the financial institution knew of Epstein’s conduct . . . beginning within the early 2000s” and argued that his crimes necessitated JPMorgan, which had Epstein as a shopper from 1998 to 2013, turning a “blind eye”.
Legal professionals for JPMorgan argued that alleged victims had “very completely different experiences” and will thus not be allowed to sue as a single group.
Choose Rakoff mentioned he understood the argument that “if these allegations are true, they might properly violate the sex-trafficking statute . . . and that if the cash was supplied by a financial institution that knew or ought to have recognized [of Epstein’s crimes] that they might be liable too”. He mentioned he would rule by June 20.
Epstein pleaded responsible in 2008 to a state cost in Florida of soliciting a minor for prostitution. Greater than a decade later he was charged by federal prosecutors with intercourse trafficking, and died by suicide in jail in 2019 whereas awaiting trial.
