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JPMorgan Chase has agreed to pay about $US290 million ($430 million) to settle a lawsuit by Jeffrey Epstein's victims who had accused the bank of being the financial conduit that allowed him to continue operating a sex trafficking operation.
Key points:
- Jeffrey Epstein, who died awaiting trial in 2019, was a JPMorgan client for 15 years
- It was alleged the US bank overlooked red flags about Epstein's sex trafficking operation
- JPMorgan says it had no knowledge of the crimes and regrets its association with Epstein
Epstein was arrested in 2019 on federal charges accusing him of paying underage girls for massages and then molesting them at his homes in Florida and New York.
The financier died by suicide at age 66 in a Manhattan jail cell while awaiting trial.
The class action lawsuit filed in a Manhattan federal court in November sought to hold JPMorgan financially liable for Epstein's decades-long abuse of teenage girls and young women.
It was alleged JPMorgan ignored internal warnings and overlooked red flags about Epstein because he had been a valuable client for 15 years.
The proposed settlement comes about two weeks after JPMorgan Chase CEO Jamie Dimon testified in a deposition for the case.
Mr Dimon denied knowing about Epstein and his crimes until his 2019 arrest, according to a transcript of the videotaped deposition released last month.
"We all now understand that Epstein's behaviour was monstrous, and we believe this settlement is in the best interest of all parties, especially the survivors, who suffered unimaginable abuse at the hands of this man," JPMorgan Chase said in a statement on Monday.
"Any association with Epstein was a mistake and we regret it. We would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes."
The proposed settlement — which must still be approved by the judge in the case — totals $US290 million, according to lead plaintiff attorney David Boies.
Last month, the Deutsche Bank where Epstein was a client from 2013 to 2018, also agreed to pay $US75 million to settle a similar lawsuit by Epstein victims.
The 'important role' of financial institutions
According to the most recent lawsuit, JPMorgan provided Epstein loans and regularly allowed him to withdraw large sums of cash from 1998 to 2013 even though it was aware of his participation in sex trafficking.
The anonymous victim in the suit — referred to as Jane Doe — said she was sexually abused by Epstein from 2006 to 2013.
On Monday, a judge ruled in favour of making Ms Doe's lawsuit into a class-action lawsuit for all victims of Epstein's sex crimes.
"Money, which for far too long flowed with impunity between Jeffrey Epstein's global sex trafficking enterprise and Wall Street's leading banks, is decisively being used for good," said Sigrid McCawley, an attorney for Jane Doe and other Epstein victims.
"The settlements signal that financial institutions have an important role to play in spotting and shutting down sex trafficking."
The bank continued to count Epstein as a client despite the fact that he was arrested and pled guilty in 2008 to sex crimes in Florida.
The lawsuit was filed after the New York state enacted a temporary law in November letting adult victims of sexual abuse sue others for the abuse they suffered, even if the abuse happened long ago.
A pending lawsuit has also been filed by the government of the US Virgin Islands where Epstein owned two neighbouring islands and was suspected of abusing victims in his mansion.
The US Virgin Islands allege JPMorgan enabled Epstein's recruiters to pay victims and was "indispensable to the operation and concealment of the Epstein trafficking enterprise".
The bank has said it had no knowledge of Epstein's crimes and it should not be held liable for a former top executive's relationship with Epstein.
The bank is still pursuing its lawsuit against the former JPMorgan employee, Jes Staley, saying he hid Epstein's crimes to keep him as a client.
Mr Staley left JPMorgan in 2013 to later become CEO of the British bank Barclays.
He later stepped down from that role in 2021 due to his prior relationship with Epstein.
AP/Reuters