JPMorgan Chase can examine statements that may have been made to Manhattan prosecutors by a woman suing the bank over its decision to retain Jeffrey Epstein as a client, a New York judge ruled on Friday.
The US lender first subpoenaed the Manhattan district attorney’s office earlier this month, requesting any statements made by an unnamed Epstein accuser to its sex crimes unit in August.
The accuser, who uses the pseudonym Jane Doe, has alleged that JPMorgan should be liable for damages over her sexual abuse at the hands of Epstein, and by Jes Staley, a former senior executive at the bank. Staley has strongly denied the allegations, calling them “slanderous”.
The bank sued Staley in March, arguing that he should be forced to shoulder the cost of any payouts in connection with the cases brought against JPMorgan by the Epstein accuser and the US Virgin Islands, where the late sex offender once had a home.
As well as seeking documents relating to Jane Doe, JPMorgan had asked the Manhattan DA for records of statements made by any “individual identifying [Staley] as an alleged witness or an alleged perpetrator of any sexual assault, sexual abuse, or other sex-related crimes”.
Judge Jed Rakoff, who is overseeing the cases in Manhattan federal court, said JPMorgan could access the records in question, which he later clarified related only to those sought in connection with Jane Doe’s statements.
The order came as JPMorgan chief executive Jamie Dimon was answering questions under oath about his knowledge of Epstein’s crimes.
The sworn testimony, which the US’s largest lender had tried to prevent from happening, marked a significant escalation in the two high-profile cases over JPMorgan’s 15-year relationship with Epstein, which have embarrassed some current and former executives and shone an unflattering light on the bank’s internal compliance processes.
Dimon’s name had already come up in the contentious litigation, with the lawsuits against JPMorgan having been filed towards the end of last year. He was referenced in an internal email expressing concerns about Epstein, containing the words “pending Dimon review”.
Mary Erdoes, a top JPMorgan executive, told lawyers in a sworn deposition in March that Dimon was solely in charge of supervising Staley, who was at the bank for decades and for a period 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 misdeeds.
In a statement, JPMorgan said: “At today’s deposition, our CEO repeatedly confirmed that he never met with [Epstein], never emailed him, does not recall ever discussing his accounts internally, and was not involved in any decisions about his account. There are millions and millions of emails and other documents that have been produced in this case and not one comes close to even suggesting that he had any role in decisions about Epstein’s accounts.”
Yet the cases remain one of the few blots on the copy book of the longtime executive. He recently announced an almost $16bn spending spree at JPMorgan, has been at the forefront of Wall Street’s lobbying efforts for a deal on the US debt ceiling to avoid default, and scooped up First Republic, a failed lender, in a government-led auction.
The litigation has also raised questions more generally about the robustness of the bank’s controls during his tenure.
“It is actually not good news if Dimon didn’t know,” a person familiar with the bank’s organisational structure said. “If nobody ever reached out to him in roughly a decade of continuing to bank [Epstein] when they knew of his conduct and when it was public, that is perhaps even worse news.”
JPMorgan has called Epstein’s scheme “monstrous” and expressed regret for having him as a client. “In hindsight, any association with [Epstein] was a mistake . . . but we did not help him commit his heinous crimes.”
Last week, Deutsche Bank settled separate Epstein-related claims for $75mn, which will be shared among dozens of women.
The stakes for JPMorgan could soon be even higher. While Dimon was being deposed on Friday, a federal judge in New York heard arguments from representatives of the Epstein accuser, who contend that potentially hundreds of women should be entitled to compensation from the bank, which they accuse of profiting from human trafficking.
Sigrid McCawley, a lawyer for Jane Doe, told the court that there was “clear evidence in the record that the bank knew of Epstein’s conduct . . . starting in the early 2000s” and argued that his crimes necessitated JPMorgan, which had Epstein as a client from 1998 to 2013, turning a “blind eye”.
Lawyers for JPMorgan argued that alleged victims had “very different experiences” and should thus not be allowed to sue as a single group.
Judge Rakoff said he understood the argument that “if these allegations are true, they may well violate the sex-trafficking statute . . . and that if the money was provided by a bank that knew or should have known [of Epstein’s crimes] that they may be liable too”. He said he would rule by June 20.
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 jail in 2019 while awaiting trial.