JPMorgan JPM -0.59%
Chase & Co. has sued former executive Jes Staley over his ties to Jeffrey Epstein, identifying Mr Staley as the “powerful financial executive” charged with sexual assault in a lawsuit against the bank.
Late last year, an unnamed woman alleged that JPMorgan aided Epstein’s sex trafficking by allowing him to remain a client and helping him send money to victims of the late financier.
The woman, in her lawsuit against the bank, said a friend of Epstein’s sexually assaulted her using aggressive force, but said she was afraid to identify him publicly. JPMorgan on Wednesday said that friend was Mr. Staley.
JPMorgan’s lawsuit against Mr Staley adds it to the woman’s lawsuit and another Epstein-related case filed by the US Virgin Islands. The legal maneuver allows the bank to argue that Mr Staley should pay damages if the bank is held liable.
A lawyer for Mr Staley declined to comment.
Mr Staley claimed he was friends with Epstein but was never aware of his alleged crimes.
“I thought I knew him well and I didn’t,” Mr Staley said in early 2020. “Certainly, looking back, with what we all know now, I deeply regret having had a relationship with Jeffrey Epstein.”
JPMorgan’s decision to try to shift the focus to Mr Staley represents a break with a former executive who had risen to the top of the bank and was once seen as a possible successor to CEO Jamie Dimon.
Mr Staley developed a relationship with Epstein when he ran JPMorgan’s asset management unit, which includes its business that caters to wealthy clients.
After leaving JPMorgan in 2013, Mr Staley became chief executive of British banking giant Barclays PLC. He resigned in November 2021 amid a UK regulatory probe into whether the bank had told the truth about his relationship with Epstein, who was accused of sex trafficking before his apparent suicide in 2019.
The lawsuits detailed Mr. Staley’s communications with Epstein as evidence that JPMorgan should have known about their relationship. Emails between the pair showed a close connection, according to court documents, and included what the US Virgin Islands said were photos of young women in seductive poses.
Mr Staley had “affirmatively misrepresented the true facts of his personal interactions with Epstein”, the bank said in court documents, and “repeatedly provided misleading information” about Epstein’s character and conduct.
“The plaintiffs have made troubling allegations regarding the conduct of our former employee Jes Staley, and if true, he should be held accountable for his actions,” a JPMorgan spokeswoman said Wednesday. “If these allegations against Staley are true, he breached that duty by putting his personal interests before those of the company.”
Brad Edwards, one of the attorneys representing the woman in the civil suit against JPMorgan, said the filing “is a damning admission of wrongdoing on the part of JPMorgan.”
Mr. Dimon should be compelled to answer questions about how he supervised Mr. Staley, Mr. Edwards said. JPMorgan resisted a filing request from Mr. Dimon in the case.
The bank called for the charges to be dismissed, saying it had no knowledge of Epstein’s alleged crimes and could not be held responsible.
The US Virgin Islands lawsuit alleges Mr Staley vouched for Epstein as a client of JPMorgan when internal compliance officials raised questions. The bank’s compliance team repeatedly sought assurances after Epstein was first charged with sex crimes in 2006, when he pleaded guilty to those charges in 2008, and in subsequent years , when reports of similar behavior continued to surface, according to court documents. .
JPMorgan said it cut Epstein’s accounts in 2013, shortly after Mr Staley left the bank. Epstein died in prison in 2019 while awaiting trial on federal sex trafficking charges.
Write to David Benoit at David.Benoit@wsj.com and Khadeeja Safdar at firstname.lastname@example.org
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