JPMorgan Sues Former Executive Over Ties to Jeffrey Epstein

Barclays CEO Jes Staley takes part in the Yahoo Finance All Markets Summit in New York, on Feb. 8, 2017. Lucas Jackson/Reuters

JPMorgan Chase is suing one of its former executives, Jes Staley, over his ties to the late financier and sex trafficker Jeffrey Epstein, who died mysteriously while in prison in an alleged suicide, in 2019.

In late 2022, a female plaintiff filed a lawsuit against JPMorgan, accusing Staley, who was employed there from 1979 to 2013, of allegedly protecting Epstein and even participating in sexual assaults against her while he was still employed as a top executive.

Staley was the CEO of Barclays from 2013 until November 2021, when British regulators launched an investigation into whether the bank had been truthful about his relationship with the late sex offender before his indictment.

The bank filed a third-party complaint against Staley on Mar. 8 in Manhattan federal court, arguing he should be held liable if allegations about his relationship with Epstein were proven to be true.

The court filing by JPMorgan admitted that Staley was the “powerful financial executive” accused of participating in an sexual offense against a unnamed female with Epstein.

The unnamed woman had mentioned Staley in her claim against the bank, without publicly naming him out of fear.

She also accused JPMorgan of aiding Epstein’s sex-trafficking operations by allowing him to remain a client and helping him send money to pay off his victims.

The bank’s legal action against its former executive is a long fall from grace for a man who was once considered a possible successor to JPMorgan CEO Jamie Dimon.

“The plaintiffs have made troubling allegations concerning the conduct of our former employee Jes Staley, and if true, he should be held responsible for his actions,” a JPMorgan spokeswoman told The Wall Street Journal.

“If these allegations against Staley are true, he violated this duty by putting his own personal interests ahead of the company’s.”

JPMorgan Stuck in Legal Triangle Due to Disgraced Former Executive

The bank has demanded that Staley return all of his compensation from 2006 through 2013 while working for them, for a total of more than $80 million, reported Bloomberg.

Meanwhile, the U.S. Virgin Islands filed a separate lawsuit against JPMorgan in January, accusing the bank of allowing Epstein to use his bank accounts to pay for more than 20 sex-trafficking victims, mostly from Eastern Europe, despite warnings from top executives about the troubling abuse allegations against him.

Virgin Islands prosecutors allege that Epstein compensated the victims by wiring them funds from a Chase account with the full knowledge of executives like Staley.

The suit would allow the bank to use a legal maneuver to force Staley to pay any damages if the bank is held responsible by the courts.

Although Staley is not a defendant in either lawsuit against the firm, JPMorgan has argued that he should still pay for any damages it is facing as a result of his relationship with Epstein.

JPMorgan’s lawsuit against Staley, combined with the two lawsuits involving the woman plaintiff and the Virgin Islands, have brought undue attention to its top leadership.

The bank managed 55 separate accounts for Epstein between 1998 and 2013 under the company’s private banking division, according to the Virgin Islands lawsuit.

Top Bank Executives Accused of Cover-Up

Staley maintained that even though he was friendly with Epstein, he never knew about his alleged sex crimes while he was running JPMorgan’s asset-management unit, which managed the finances of wealthy clients.

“I thought I knew him well, and I didn’t,” he told The Wall Street Journal in early 2020.

“For sure, with hindsight, with what we all know now, I deeply regret having had any relationship with Jeffrey Epstein,” Staley said.

However, the two lawsuits have revealed private communications between Epstein and Staley showing evidence that JPMorgan should have done more about their relationship.

Recently released emails between the two men appear to show that they were once close, which also included what the U.S. Virgin Islands described as photos of young women in sexually explicit poses.

Staley exchanged about 1,200 emails with Epstein between 2008 and 2012, including one from December 2009 in which Epstein told Staley, “[Y]ou were with Larry and I had to put up with...” [an image of a young woman].

“These women were trafficked and abused during different intervals between at least 2003 and July 2019, when Epstein was arrested and jailed, and these women received payments, typically multiple payments, between 2003 and 2013 in excess of $1 million collectively,” say prosecutors.

The Virgin Islands accused Staley of vouching for Epstein as a JPMorgan client, despite objections from internal compliance officers.

The bank’s compliance team had repeatedly requested reassurances from executives due to potential liabilities after Epstein was first indicted on sex-crime charges in 2006 and his guilty plea to those charges, and later when reports about his crimes became public knowledge, according to court papers.

JPMorgan said it finally cut off Epstein’s accounts in 2013, just after Staley left the bank.

Local authorities said that the banking giant had three opportunities to cut ties with Epstein in 2006, 2010, and 2011, but instead continued to provide him services.

“JPMorgan knew early on that Epstein was an extremely high-risk client, but decided, at multiple points during the relationship, to continue servicing Epstein’s accounts because of his vast wealth and connections with other high-net-worth individuals,” prosecutors claim.

JPMorgan Shifts the Blame to Former Star Executive

The bank has sought to have the both lawsuits dismissed, denying any knowledge about Epstein’s alleged crimes and claiming that it could not be held liable.

It also now appears that Staley’s former employer is now using him as a scapegoat to pass the blame.

“Staley’s acts of disloyalty occurred repeatedly, lasted for years, and persisted despite numerous opportunities to correct them,” according to court filings by attorneys for JPMorgan.

The financial giant said that he “affirmatively misrepresented the true facts of his and Epstein’s personal interactions,” and “repeatedly provided misleading information” about Epstein’s character and conduct.

Still, Brad Edwards, one of the lawyers representing the woman in the civil suit against JPMorgan, told The Wall Street Journal said the bank’s suit against Staley “is a damning admission of wrongdoing by JPMorgan.”

Edwards said that Dimon should be forced to answer questions about how he supervised his former subordinate.

The bank has been resisting all requests for its CEO to be deposed in the case, and no ruling has been made whether he will be forced to testify.

On Mar. 9, a judge ruled that JPMorgan must turn over documents from Dimon through 2019, a wider timeframe which the bank had objected to.