JPMorgan, ex-executive spar in court over responsibility for Epstein

by mcardinal

A judge said on Friday he would decide by the end of the month whether a JPMorgan Chase & Co lawsuit should proceed against a former executive who it accuses of entangling the bank with late financier and convicted sex offender Jeffrey Epstein.

U.S. District Judge Jed Rakoff in Manhattan spoke after a one-hour hearing over whether to let the largest U.S. bank sue Jes Staley, its former private banking head.

JPMorgan wants Staley to cover some or all damages it might face in lawsuits brought by Epstein’s accusers and the U.S. Virgin Islands over its ties to Epstein.

The lawsuits accuse the bank of aiding in Epstein’s sex trafficking by keeping him as a client from 1998 to 2013, the last five years after he pleaded guilty to a Florida prostitution charge.

Had Staley “observed his obligations, Epstein would not have been a client,” said Leonard Gail, a lawyer for JPMorgan.

Staley, who later served as Barclays Plc’s chief executive, has expressed regret for befriending Epstein but denied knowing about his crimes.

He has accused JPMorgan of using him as a “public relations shield” for its own supervisory failures,” and that others at the bank were aware of Epstein’s misconduct.

“They are not purely passive,” Staley’s lawyer Stephen Wohlgemuth said on Friday.

The cases are slated for an Oct. 23 trial.

Rakoff has said JPMorgan could be liable if Epstein’s accusers can prove that Staley had firsthand knowledge that Epstein, who was known to socialize with prominent politicians and business leaders, ran a sex-trafficking venture.

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

Copyright 2023 Thomson/Reuters