JPMorgan Chase have agreed to pay about $US290 million ($A429 million) to settle a class action lawsuit by Jeffrey Epstein’s victims, a person familiar with the matter said, resolving a large part of litigation over the bank’s relationship with the disgraced financier.
Monday’s settlement follows months of embarrassing disclosures that JPMorgan ignored internal warnings and overlooked red flags about Epstein because he had been a valuable client over a 15-year period.
Epstein was a JPMorgan client from 1998 to 2013, and was kept on even after being arrested in 2006 on prostitution-related charges and pleading guilty two years later.
Monday’s accord would resolve claims against the largest US bank by potentially more than 100 victims, led by a former ballet dancer known as Jane Doe 1, who said Epstein abused them when they were young women and teenage girls.
Epstein killed himself at age 66 in a Manhattan jail cell in August 2019 while awaiting trial on sex trafficking charges.
“It could be that the bank doesn’t want this to stay in the press,” said Carliss Chatman, a professor at Washington and Lee University School of Law in Virginia.
“At a time Americans are questioning the banking system, associating Chase with human trafficking is not good for business.”
In a statement, JPMorgan and lawyers for Epstein’s victims said they had agreed in principle to settle the civil case.
The accord requires approval by US District Judge Jed Rakoff in Manhattan.
“Any association with was a mistake and we regret it,” JPMorgan said in a statement.
“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.”
Monday’s settlement came three-and-a-half weeks after Deutsche Bank , where Epstein was a client from 2013 to 2018, agreed to pay $US75 million ($A111 million) to end a similar lawsuit by Epstein victims.
“Deutsche Bank’s settlement … likely created momentum,” said Adam Zimmerman, a law professor who recently accepted a position at the University of Southern California. “A settlement with Epstein’s victims frees JPMorgan to begin to turn the page and change the narrative.”
JPMorgan did not admit wrongdoing in agreeing to settle, according to the person familiar, who spoke on condition of anonymity.
“The settlements signal that financial institutions have an important role to play in spotting and shutting down sex trafficking,” Sigrid McCawley, a lawyer for victims in both lawsuits, said in a statement.
JPMorgan still faces a lawsuit by the government of the US Virgin Islands, where Epstein owned two neighbouring islands and was suspected of abusing victims in his mansion.
It is also suing former executive Jes Staley for shepherding Epstein’s relationship with the bank and concealing what he knew about his former friend.
JPMorgan wants Staley to cover its losses in both lawsuits and forfeit eight years of pay.
Last month, Rakoff said JPMorgan could be liable to Epstein’s victims if they could show Staley had first-hand knowledge that Epstein ran a sex-trafficking venture.
Staley left JPMorgan in 2013 and was later Barclays’ chief executive for six years.
He testified under oath on Saturday, two weeks after JPMorgan Chief Executive Jamie Dimon, in his own deposition, denied discussing Epstein’s accounts.
Staley has said he regretted befriending Epstein, but denied knowing about his sex trafficking. It wasn’t clear whether his June 10 deposition was a factor in Monday’s settlement.
Lawyers for Staley did not immediately respond to requests for comment.