Jes Staley will have to face claims that he misled JPMorgan Chase about his relationship with Jeffrey Epstein after a New York judge denied the banker’s attempt to dismiss a lawsuit brought by his former employer.
The 66-year-old, who spent more than 30 years at JPMorgan before being fired in 2013, was sued by the bank in March, seeking to make Staley liable for any damages awarded in two separate claims over JPMorgan’s decision to retain Epstein as a client for 15 years.
The lawsuits against JPMorgan were filed towards the end of last year, one by an unnamed Epstein accuser, and the other by the US Virgin Islands, where the disgraced financier had a home.
They allege that JPMorgan benefited from human trafficking by continuing to provide banking services to Epstein despite multiple internal red flags about his arrest and charge for soliciting a minor in Florida, and reports that he was using cash to pay off sex abuse victims.
The Epstein accuser also alleged she was raped by Staley, and that Staley witnessed her being abused — claims that Staley has strongly denied.
JPMorgan said that if such allegations were true, Staley, who was for a period Epstein’s private banker, failed to comply with his fiduciary duties.
The lender also said Staley, who vouched for Epstein within the bank, may have mischaracterised the nature of his relationship with the disgraced financier, which allegedly involved several visits to Epstein’s properties and emails in which photographs of young women were exchanged.
In communications entered into evidence as part of the cases against JPMorgan, Staley described himself as owing Epstein “much”, and stated that he had few friendships as “profound”.
As well as seeking to make Staley liable for any damages it faces, JPMorgan is also attempting to claw back some of Staley’s pay.
Staley went on to lead Barclays bank in Britain before resigning following an investigation into the way he characterised his relationship with Epstein. He has described JPMorgan’s allegations as “slanderous” and “baseless but serious”. His lawyers did not immediately respond to a request for comment on Wednesday’s decision.
Staley’s legal team had attempted to get JPMorgan’s claim dismissed, arguing that the bank’s case was “completely absent” of concrete claims.
“They have to make the allegations . . . they have to say what is true and what is not,” Staley’s lawyer Stephen Wohlgemuth told the court last week.
“This alleged vouching . . . would have been made to JPMorgan employees,” Wohlgemuth said, adding that the bank could provide a full account of what happened. “What does the bank say? Was there vouching? What did Mr Staley actually say . . . who did he say it to and why did they rely on it?”
JPMorgan declined to comment on the decision. Last week, the bank said in a statement: “Staley is accused of unspeakable acts that are the foundation of the claims against the bank. If true, he is accountable for any harm done not just to the bank, but to these women.”
Judge Jed Rakoff, who is overseeing the case, said he would explain his reasoning for denying Staley’s motion to dismiss at a later date. The cases are scheduled to go to trial in New York in October.
If JPMorgan succeeds in its efforts to implicate Staley, the executive could be liable for millions of dollars in damages. Last week, Deutsche Bank, which retained Epstein as a client for five years, set aside $75mn to settle a separate claim by an unnamed victim, on behalf of dozens of women.