Jes Staley lost his bid to dismiss JPMorgan Chase & Co.’s lawsuit seeking to make him pay if the bank is found liable for its relationship to Jeffrey Epstein.
(Bloomberg) — Jes Staley lost his bid to dismiss JPMorgan Chase & Co.’s lawsuit seeking to make him pay if the bank is found liable for its relationship to Jeffrey Epstein.
US District Judge Jed Rakoff on Wednesday denied Staley’s motion to dismiss, meaning the case against him will go forward to pre-trial evidence gathering.
JPMorgan is seeking to hold Staley, its former private banking head, responsible for any damages from two suits accusing the bank of knowingly benefiting from Epstein’s sex-trafficking. It’s also seeking to recover tens of millions of dollars it paid to Staley when he worked at the bank.
Staley, who worked at JPMorgan for more than 30 years, had argued that he had no decision-making authority over Epstein’s accounts. He accused JPMorgan of using him as “a public relations shield.”
Rakoff denied Staley’s motion in a two-page order, saying he will explain his reasoning later in a fuller opinion.
Lawyers for Staley didn’t immediately respond to a request for comment on Wednesday.
Epstein was a JPMorgan client from 1998 to 2013. The bank is now facing a suit by the US Virgin Islands and a proposed class action by an unidentified victim of Epstein, both of whom cite Staley’s friendship with Epstein and claim he knew about the financier’s sex crimes. Though Staley is not a defendant in either of those suits, the plaintiffs argue that Staley’s knowledge should be imputed to JPMorgan.
‘Deflect Blame’
JPMorgan sued Staley via third-party complaint in March, claiming he should be responsible for any damages it may have to pay as a result of his relationship to Epstein and for misleading colleagues about its sex offender client.
Staley has denied the allegations against him. After leaving JPMorgan in 2013, he eventually joined Barclays Plc as chief executive officer but stepped down in 2021 over his ties to Epstein.
In his motion to dismiss, Staley said JPMorgan wanted to “change the narrative and deflect blame” by pulling him into the case. He denied misleading the bank, noting that “numerous JPMorgan employees knew that Mr. Staley had a relationship with Epstein, and the bank had access to Mr. Staley’s communications.”
A number of legal experts have said JPMorgan’s suit gives it a chance to settle the claims against it while shifting the blame to Staley.
Read More: JPMorgan’s Staley Suit Seen as Prelude to Epstein Settlement
Earlier this month, Deutsche Bank AG, which became Epstein’s main financial institution after JPMorgan cut ties with him in 2013, agreed to pay $75 million to settle a similar victims’ suit. Deutsche Bank did not admit wrongdoing in the settlement.
Deutsche Bank’s settlement leaves JPMorgan alone in defending against victims’ claims and may put pressure on the bank to consider its own deal.
Epstein was found dead in a New York federal lockup in August 2019, about five weeks after he was arrested on charges of trafficking underage girls for sex. Epstein’s death prompted outrage from his victims as well as countless conspiracy theories about how he died.
The city’s chief medical examiner ruled that Epstein hanged himself in his cell.
The cases are USVI v. JPMorgan Chase Bank, 22-cv-10904, and Jane Doe 1 v. JPMorgan Chase Bank, 22-cv-10019, US District Court, Southern District of New York (Manhattan).
–With assistance from Ava Benny-Morrison.
(Updates with background starting in fifth paragraph.)
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