JPMorgan’s Jamie Dimon set to face questioning in Jeffrey Epstein cases

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108 shares, 169 points

JPMorgan Chase chief executive Jamie Dimon is set to answer questions under oath on Friday about his knowledge of Jeffrey Epstein’s crimes, as the legal reckoning over the bank’s decision to retain the late sex offender as a client reaches Wall Street’s highest echelons.

The sworn testimony, which the US’s largest lender had tried to prevent from happening, marks a significant escalation in two high-profile cases over JPMorgan’s 15-year relationship with Epstein, which has embarrassed some current and former executives and shone an unflattering light on the bank’s internal compliance processes. The deposition will take place behind closed doors and is set to last up to two days.

Dimon’s name has already come up in the contentious litigation, which was brought by an unnamed Epstein accuser and the US Virgin Islands, on which Epstein had a home, towards the end of last year. 

Mary Erdoes, a top JPMorgan executive, told lawyers in a sworn deposition in March that Dimon was solely in charge of supervising Jes Staley, a former bank executive who allegedly vouched for Epstein repeatedly at JPMorgan, according to people familiar with the matter.

The 67-year-old was also referenced in an internal email expressing concerns about Epstein, containing the words “pending Dimon review”.

In a statement, JPMorgan said its boss had never met with Epstein, “spoke with him, [or] emailed with him, and was not involved in any decisions about his account”. The bank added: “The plaintiffs know this based on decades of discovery and millions of emails . . . yet they persist in pursuit of publicity”.

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 US lender, in a government-led auction. 

JPMorgan first took on Epstein as a client in 1998 and continued to bank him until 2013.

Dimon is expected to testify that he did not have any knowledge of the multiple internal red flags raised about Epstein’s accounts. Nonetheless, the cases have raised questions more generally about the robustness of the bank’s controls. 

“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 banking him. “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 is being deposed on Friday, a federal judge in New York will hear arguments from representatives of the Epstein accusers, who contend that dozens, if not hundreds of women should be entitled to compensation from the bank, which they accuse of profiting from human trafficking.

On the eve of Dimon’s deposition, JPMorgan fired back at the USVI, alleging in court filings that the territory’s officials had turned a blind eye to Epstein’s crimes, and even issued visas to some of his victims.

“Epstein could have lived anywhere in the world. He chose USVI,” JPMorgan’s lawyers said. “They shielded and even rewarded him, granting him [millions of dollars] in tax incentives . . . looking the other way when he walked through USVI airports accompanied by girls and young women.”

In response, the US Virgin Islands attorney-general’s office said such accusations were “an obvious attempt to shift blame away from JPMorgan Chase, which had a legal responsibility to report the evidence in its possession of Epstein’s human trafficking, and failed to do so”.

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 while awaiting trial.

Source: Financial Times

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