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A federal judge on Thursday approved a settlement of a class-action lawsuit in which JPMorgan Chase will pay $290 million to sex abuse victims of Jeffrey Epstein, who alleged the bank ignored warnings about the disgraced financier.
The money paid by JPMorgan, the nation’s largest bank, could provide compensation to nearly 200 of Mr. Epstein’s victims, according to a legal filing. JPMorgan and the victims’ attorneys reached a tentative settlement in June, averting a possible civil lawsuit in federal court in Manhattan.
The judge, Jed Rakoff, gave final approval to the deal after an afternoon hearing to assess the settlement’s fairness to the victims. The settlement closes an important chapter in the Epstein saga, centering on the role of the big banks in allowing his behavior to continue for almost two decades.
Fifteen unidentified victims submitted written statements supporting the deal. Some, including one who said she was just 13 when Mr. Epstein first sexually abused her, wrote that they still suffered from depression, anxiety, panic attacks and eating disorders.
Attorneys general from 16 states and Washington, DC, expressed concerns about some of the language in the settlement in a letter to the judge. They said a broad release to JPMorgan could prevent some states from pursuing their own sex trafficking claims under a federal law that allows state governments to file civil lawsuits on behalf of sex abuse victims.
But Judge Rakoff said the issue raised by the attorneys general was a hypothetical and that he found no problem with the settlement language.
“This case sent the message through this very substantial settlement that banking institutions have a responsibility,” Judge Rakoff said.
The judge said that given the large amount of money to be paid to the victims, he ordered the settlement fund administrator to send him periodic confidential reports on its work.
The settlement between Mr. Epstein’s victims and JPMorgan resolves a lawsuit filed last November on behalf of victims whom Mr. Epstein sexually abused for about 15 years, ending in 2013. The lawsuit alleged that JPMorgan ignored repeated red flags that Mr. Epstein trafficked teenage girls. and young women for sex, even after he pleaded guilty in Florida in 2008 to soliciting prostitution from a teenage girl.
The lawsuit was one of two civil lawsuits arising from JPMorgan’s dealings with Mr. Epstein, who committed suicide in 2019 in a federal prison in Manhattan, about a month after his arrest on sex trafficking charges. In September, the bank agreed to pay $75 million to the U.S. Virgin Islands to settle claims that it did nothing to deter a sex trafficking operation that Mr. Epstein ran from his private island on U.S. soil.
The bank reached both settlements after months of embarrassing revelations about how top JPMorgan executives kept Mr. Epstein as a client despite numerous warning signs.
Judge Rakoff approved a request from the two law firms that filed the class action lawsuit against the bank – Boies Schiller Flexner and Edwards Henderson Lehrman – to keep 30 percent of the settlement as legal fees. The firms will also be reimbursed for $1.1 million of the settlement amount for legal costs, according to a court filing.
The two law firms received a similar 30 percent cut on a $75 million settlement they negotiated with Deutsche Bank, which provided banking services to Mr. Epstein in the years after JPMorgan fired him as a client in 2013.
