JPMorgan Chase can study statements which will have been made to Manhattan prosecutors by a girl suing the financial institution over its resolution to retain Jeffrey Epstein as a consumer, a New York decide 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 must be responsible for damages over her sexual abuse by the hands of Epstein, and by Jes Staley, a former senior government on the financial institution. Staley has strongly denied the allegations, calling them “slanderous”.
The financial institution sued Staley in March, arguing that he must be pressured to shoulder the price of any payouts in reference to the instances introduced towards 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 looking 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”.
Decide Jed Rakoff, who’s overseeing the instances in Manhattan federal court docket, mentioned JPMorgan might 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 government Jamie Dimon was answering questions beneath 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 big 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 mild on the financial institution’s inside compliance processes.
Dimon’s title had already come up within the contentious litigation, with the lawsuits towards JPMorgan having been filed in direction of the tip of final 12 months. He was referenced in an inside e mail expressing considerations about Epstein, containing the phrases “pending Dimon evaluate”.
Mary Erdoes, a prime JPMorgan government, advised attorneys 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, in line with individuals accustomed to the matter. JPMorgan’s lawsuit towards Staley alleges he misled the financial institution about Epstein’s misdeeds.
In an announcement, JPMorgan mentioned: “At at present’s deposition, our CEO repeatedly confirmed that he by no means met with [Epstein], by no means emailed him, doesn’t recall ever discussing his accounts internally, and was not concerned in any choices about his account. There are thousands and thousands and thousands and thousands of emails and different paperwork which have been produced on this case and never one comes near even suggesting that he had any function in choices about Epstein’s accounts.”
But the instances stay one of many few blots on the copy e-book of the longtime executive. He just lately introduced an nearly $16bn spending spree at JPMorgan, has been on the forefront of Wall Road’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 typically concerning the robustness of the financial institution’s controls throughout his tenure.
“It’s really not excellent news if Dimon didn’t know,” an individual accustomed to the financial institution’s organisational construction mentioned. “If no person ever reached out to him in roughly a decade of continuous to financial institution [Epstein] after 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 consumer. “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 will likely be shared amongst dozens of ladies.
The stakes for JPMorgan might quickly be even greater. Whereas Dimon was being deposed on Friday, a federal decide in New York heard arguments from representatives of the Epstein accuser, who contend that probably a whole bunch of ladies must be entitled to compensation from the financial institution, which they accuse of taking advantage of human trafficking.
Sigrid McCawley, a lawyer for Jane Doe, advised the court docket that there was “clear proof within the file 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 consumer from 1998 to 2013, turning a “blind eye”.
Attorneys for JPMorgan argued that alleged victims had “very totally different experiences” and may thus not be allowed to sue as a single group.
Decide Rakoff mentioned he understood the argument that “if these allegations are true, they might effectively violate the sex-trafficking statute . . . and that if the cash was offered 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.