JPMorgan Chase CEO Jamie Dimon, asset- and wealth management chief Mary Erdoes and former private-banking chief Jes Staley are among 25 defendants listed in a lawsuit filed Tuesday against the bank by investor Operating Engineers Construction Industry and Miscellaneous Pension Fund.
The bank risked its reputation by failing to report suspicious activity in convicted sex offender Jeffrey Epstein’s account. The late financier was a client of JPMorgan’s between 1998 and 2013.
Erdoes “admitted in her deposition” last month that the bank was aware by 2006 that Epstein had been accused of paying cash to have underage girls and young women brought to his home in the U.S. Virgin Islands, according to a separate court filing.
JPMorgan faces at least two court cases in the matter — one from the USVI and another from alleged Epstein victims. Dimon and Staley are each set to be deposed this month.
“JPMorgan has suffered and will continue to suffer substantial monetary and reputational harm for its longstanding role in assisting the most egregious sex trafficker in modern history,” the pension fund said in its complaint Tuesday.
JPMorgan didn’t immediately respond to a request for comment from Bloomberg.
But lawyers for the bank, in a separate filing Monday, alleged Staley knew of Epstein’s sex-trafficking operation “but thwarted any efforts within JPMC to sever ties” with the client.
Staley “persisted for years in protecting Epstein in the face of attempts by JPMC personnel to end the company’s relationship with Epstein on reputational grounds, made misrepresentations in the process, and continued to do so to the end of his JPMC tenure,” the bank claimed Monday, according to the Financial Times.
The pension fund, meanwhile, wants the U.S. District Court for the Southern District of New York to find that JPMorgan executives breached their duty to report Epstein’s conduct and to pay its legal costs.
The bank this week endured one strike against it in that regard: A Delaware judge ordered JPMorgan to cover the legal bills of Charlie Javice, the founder of Frank, a now-defunct college-aid planning site the bank bought in 2021. JPMorgan shut down the Frank website late last year and sued Javice, alleging she inflated the business’s customer base to convince the bank to pull the trigger on a $175 million acquisition. A competing bank reportedly also was showing interest in Frank at the time.
Javice also faces fraud charges from the Justice Department and the Securities and Exchange Commission. JPMorgan may also have to cover Javice’s legal costs related to those cases, Bloomberg reported Monday.
In a reference to the USVI and alleged Epstein victim suits, the pension fund on Tuesday said “JPMorgan is exposed to substantial legal risk due its role in helping conceal Epstein’s crimes.”