Jamie Dimon wasn’t going to be humiliated into a settlement. As destructive discoveries about the degree of JPMorgan Chase’s relationship with Jeffrey Epstein dripped out of a suit this year, his bank balked at paying up.
The long time JPMorgan chief informed associates he saw the battle as one of “principle.” He and others within the bank saw the complainant — the United States Virgin Islands, where Epstein had a personal island — not as a victim, however rather complicit in the departed sex transgressor’s criminal activities.
From the minute a year ago when the company’s leading brass was amazed to find out that the area would be pursuing a claim, through months of USVI lawyers taking objective initially at Dimon and after that among his leading deputies, JPMorgan’s leaders were required to weigh the legal, reputational and psychological issues of the case. All the while, contents of old e-mails spilled into public view, narrating years of close ties to among this age’s most infamous sex culprits.
Ultimately, the $75 million JPMorgan accepted pay the USVI today is a small number for the company, which creates that much in income in about 5 hours. Even integrated with the $290 million settlement it reached with Epstein’s victims in June, the overall expense hardly moves the needle for the most significant and most successful bank in American history.
JPMorgan’s combative technique with the United States Virgin Islands caused it going for a quarter of what the area had actually looked for in earlier talks. But it’s likewise left the company looking for to tally the supreme damage of its year of being haunted by Epstein — a years after ejecting him as a customer and 4 years after his death in a Manhattan prison cell — from which nearly nobody included emerged unharmed.
This account is based upon interviews with majority a lots individuals near to the case, who asked not to be recognized going over personal matters, in addition to court files and other filings. A JPMorgan agent decreased to comment.
“The undisputed facts about JPMorgan Chase’s relationship with Jeffrey Epstein are now publicly available,” Venetia Velazquez, a representative for the United States Virgin Islands Department of Justice, stated in an emailed declaration. “The USVI DOJ is pleased JPMorgan Chase has made meaningful commitments to establish and implement measures to combat human trafficking as part of the precedent-setting settlement agreement.”
Details of JPMorgan’s banking relationship with Epstein started to emerge around the time he passed away in August 2019. As federal government entities dug deeper into Epstein’s sex-trafficking operation, executives at New York-based JPMorgan saw an increasing possibility of being pulled into lawsuits.
But they didn’t believe that would consist of a suit from the USVI, where Epstein had a personal island and trafficked a few of his victims. That was till a conference last September, throughout which USVI authorities set out investigative findings versus JPMorgan to its attorneys. Armed with chests of e-mails the area had actually currently acquired through subpoenas, it took legal action against in December and rapidly started pursuing a few of JPMorgan’s highest-ranking authorities — beginning with the CEO.
The USVI at first looked for to reveal that Dimon, 67, was associated with choices around Epstein’s accounts. It pointed out an internal e-mail from 2008, the year Epstein pleaded guilty to getting a small for prostitution, where a staffer anticipated Epstein’s properties would leave the bank that year “pending Dimon review.”
In reaction to the February filing, JPMorgan stated it had actually seen no proof of such an evaluation. The company’s attorneys battled the complainants’ demands to depose Dimon, however he ultimately reserved 2 days for questioning under oath.
Over 7 hours in late May — 3 years to the day after the USVI very first subpoenaed JPMorgan in its case versus Epstein’s estate — Dimon consistently stated that he never ever satisfied or emailed Epstein and wasn’t associated with choices over his account. Afterward, JPMorgan even accepted launch the records.
Behind the scenes, mediation talks that had actually started previously that month were continuous. Those led to JPMorgan’s contract in June to pay $290 million to the victims, who took legal action against the bank in November. Some executives saw the claims as meritless, while others preferred a fast settlement to acknowledge the victims’ suffering and end the chapter in the legend that gathered the most public compassion.
JPMorgan’s fight with the USVI, nevertheless, was a various story. Their talks broke down when the area required a $300 million settlement, so the bank pushed ahead with its battle.
By that time, JPMorgan was likewise pursuing claims of its own versus Jes Staley, its previous private-banking chief whose close relationship with Epstein was main to both cases versus the bank. The company implicated him of hiding an “inappropriate relationship” with Epstein and attesting his character to keep him on as a customer. (JPMorgan and Staley likewise reached a settlement today, for concealed terms.)
That’s when Mary Callahan Erdoes, JPMorgan’s long time possession- and wealth-management head, discovered herself in the crossfire. Lawyers for the USVI took on her old missives with Epstein, in addition to the truth that he patronized of her department for so long. JPMorgan’s drawbacks were institutional, it argued, instead of the fault of one “bad apple.”
Erdoes, 56, increased through JPMorgan’s personal bank to become its chief in 2005, being successful Staley, her coach at the time. When Staley, 66, was tapped to lead the financial investment bank in 2009, he advised Erdoes as his replacement, and she got the task — one she still holds today.
JPMorgan has actually consistently credited Erdoes with shooting Epstein as a customer in 2013, however, as the cases dragged out, both the USVI and Staley indicated her lots of messages with him for many years to reveal the bank’s responsibility.
So for Erdoes, the drip-drip continued. She was deposed two times this year, and, till the resolutions today, the possibility remained that she may be contacted us to affirm at trial. Even now, associates are independently considering the supreme effect for Dimon’s longest-serving deputy. The CEO has actually supported her throughout the procedure.
The cases likewise cast a shadow beyond JPMorgan’s 4 walls. Steve Cutler, the bank’s previous basic counsel, and Catherine Keating, who led the company’s United States personal bank more than a years back and now runs wealth management at Bank of New York Mellon, both dealt with depositions of their own and saw their old e-mails revealed.
Paul Barrett, a previous JPMorgan lender who signed up with Citigroup in 2019, left that bank days after an April report that he set up a minimum of 5 conferences with Epstein in between 2014 and 2017. At the time, a Citigroup representative verified Barrett was no longer a staff member and stated that “until recently, Citi was unaware of Paul Barrett’s association with Jeffrey Epstein.”
Deutsche Bank concurred in May to pay $75 million to Epstein victims who implicated the German business of assisting in the investor’s sex-trafficking operation. Epstein moved his accounts to Deutsche Bank after JPMorgan cut ties with him, till 2018.
Goldman Sachs General Counsel Kathy Ruemmler come to grips with restored examination of her previous expert transactions with Epstein, which she has actually stated she is sorry for and informed her company about when she participated in 2020. Even Elon Musk was served a subpoena, which he called “idiotic,” rejecting that Epstein ever recommended him.
In completion, while the claims was among the worst public episodes in Dimon’s nearly 18 years atop JPMorgan, he personally came through it with little damage to his track record. The outspoken CEO was uncommonly mum on the cases in the beginning, decreasing to discuss continuous lawsuits, however he changed techniques to a significantly robust apology as the cases dragged out.
“I am so sad that we had any relation to that man whatsoever,” Dimon stated in a Bloomberg Television interview in early May, ahead of his deposition. “It’s very unfortunate and I have deep respect for these women. That doesn’t mean we’re liable for the action of an individual, but I do have deep respect for them and my heart goes out to them.”