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JPMorgan pays US$75 million to settle lawsuit over Jeffrey Epstein ties

Epstein had been a JPMorgan client from 1998 until 2013, when the New York-based bank fired him.

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JPMorgan Chase Bank is seen in New York City, US, March 21. Photo: Reuters
JPMorgan Chase Bank is seen in New York City, US, March 21. Photo: Reuters

JPMorgan Chase agreed to pay US$75 million (about RM351.4 million) to settle claims by the US Virgin Islands that the bank aided in the disgraced financier Jeffrey Epstein's sex trafficking.

The largest US bank also reached a confidential settlement with Jes Staley, a former private banking chief who was close to Epstein and who JPMorgan blamed for keeping him as a client.

Both settlements were reached four weeks before a scheduled trial, largely resolving a scandal that has weighed on JPMorgan all year.

They conclude the final pieces of major litigation over Epstein's sexual abuse of women, which has embroiled prominent people such as Britain's Prince Andrew and powerful figures in business.

Lawsuits against JPMorgan also called into question the bank's oversight of clients, with accusations it ignored red flags and internal warnings about Epstein, including over money he supposedly withdrew to pay young women and teenage girls.

Epstein had been a JPMorgan client from 1998 until 2013, when the New York-based bank fired him.

"The firm deeply regrets any association with this man, and would never have continued doing business with him if it believed he was using the bank in any way to commit his heinous crimes," JPMorgan said in a statement.

Sounding the alarm

The US Virgin Islands settlement calls for JPMorgan to pay US$30 million to support charitable organisations, US$25 million to combat human trafficking, and US$20 million to the territory's lawyers.

JPMorgan did not admit wrongdoing. It agreed in June to pay US$290 million to resolve separate claims by dozens of Epstein's accusers.

US Virgin Islands Attorney General Ariel Smith said the settlement was a "historic victory for survivors and for state enforcement, and it should sound the alarm on Wall Street about banks' responsibilities under the law to detect and prevent human trafficking."

Last November, the territory reached a separate settlement of at least US$105 million with Epstein's estate.

Lawyers for Staley did not immediately respond to requests for comment.

JPMorgan had wanted him to cover its losses in its other two lawsuits, and forfeit eight years of pay.

Staley left JPMorgan in 2013, shortly before Epstein was fired, and later spent six years as Barclays' chief executive. He has expressed regret for his friendship with Epstein and denied knowing about his sex trafficking.

Epstein died in August 2019 in a Manhattan jail cell while awaiting trial for sex trafficking. New York City's medical examiner called his death a suicide.

Laying blame

The US Virgin Islands had been seeking at least US$190 million from JPMorgan.

It accused the bank of ignoring warning signs about Epstein's misconduct, even after his 2006 arrest on prostitution charges and guilty plea two years later.

The territory also said some bank officials stayed in touch with Epstein long after he was dismissed as a client.

JPMorgan countered that the US Virgin Islands was also at fault, for giving Epstein tax incentives and waiving monitoring requirements in exchange for cash and gifts to local officials, including a former first lady.

Epstein had owned two private islands within the territory, including one he allegedly bought to keep onlookers from spying on his misconduct on the other.

JPMorgan's ties to Epstein became a rare public relations problem for Jamie Dimon, the bank's CEO since 2006.

Dimon testified under oath in May that he had barely heard of Epstein until the financier's July 2019 arrest.

Among those ensnared by the scandal was Leon Black, the billionaire co-founder of private equity firm Apollo Global Management, who had close business ties with Epstein.

Black reached his own US$62.5 million settlement with the US Virgin Islands earlier this year, to avoid a possible lawsuit.

He has denied enabling Epstein's sex abuses, and regretted his ties with the financier.

Deutsche Bank, where Epstein was a client from 2013 to 2018, reached a US$75 million settlement with Epstein's accusers in May.