On Friday, March 19th, 2021, JPMorgan Chase & Co. agreed to pay $75 million to settle a lawsuit alleging the bank had supported Jeffrey Epstein’s sex-trafficking ring. The lawsuit was brought against the bank’s executives and directors by a group of its shareholders who accused them of misconduct and negligence.
In 2015, media reports emerged of the notorious financier’s ties to the bank. An investigation by The New York Times revealed that Epstein maintained accounts with the bank worth hundreds of millions of dollars. Investigators alleged Epstein diverted investors’ funds deposited at the bank to fund his illicit activities. In addition to allowing Epstein’s bank accounts to remain open, the shareholders claimed the bank knew of his predatory activities and willfully failed to stop them or alert authorities.
In a statement to shareholders, JPMorgan Chase spokesperson Jennifer Piepszak acknowledged the bank’s role in the Epstein scandal and apologized for its inaction. “We accept responsibility for our past mistakes,” said Piepszak. “Our actions did not and could never reflect the values of JPMorgan Chase and the critical standards we set for ourselves, our clients, our employees and our communities.”
The lawsuit, which was filed in 2019 in the Southern District of New York, claimed the bank’s negligence had resulted in a loss of market capitalization and irreparable damage to the bank’s reputation. The $75 million settlement, which is subject to approval by the court, is expected to be divided among the group of 233 shareholders. In addition to the monetary settlement, the bank has also agreed to strengthen its internal compliance and risk management procedures.
This settlement is yet another reminder of the importance of financial institutions being vigilant and taking responsibility for the actions of their partners. For years, Epstein and his associates were able to perpetrate their “dark money” activities without repercussions, but the JPMorgan case demonstrates the dire consequences companies will face if they fail to exercise due diligence when it comes to their business relationships or remain willfully ignorant of the riskier connections their financial partners have established.