Jeffrey Epstein’s Bankers

JPMorgan executives knew that Jeffrey Epstein was bad news. As far back as 2006 — long before his 2019 arrest — officials debated cutting their longtime client loose. Employees raised concerns about the danger of doing business with the admitted criminal, and officials confronted him about news reports that he had raped and trafficked young women and girls.

But Epstein generated millions of dollars for JPMorgan. The giant bank lent him large sums and processed more than $1 billion of transactions for him (including payments to women who had been lured into his sex-trafficking network). Bankers debated the risks and decided he could stay, according to an investigation my colleagues Matt Goldstein and Jessica Silver-Greenberg and I published today. In short, until JPMorgan dropped him as a client in 2013, America’s leading bank financially enabled the century’s most notorious sexual predator.

Why? The answer, we found, is that bankers, like all people, respond to incentives — and the incentives at JPMorgan rewarded doing business with Epstein. Today’s newsletter explains them.

A lucrative client

Epstein kept hundreds of millions of dollars at the bank. At one point, he generated more revenue than any other investor client in JPMorgan’s private-banking division, which caters to the richest of the rich.

But Epstein was much more than just another customer. He introduced bank executives to other clients, including Sergey Brin, the Google co-founder who parked more than $4 billion at JPMorgan. He helped orchestrate an important acquisition for the bank. And he was a trusted adviser to some of the bank’s top executives — even while he was incarcerated in Florida after pleading guilty to a sex crime.

Long after Epstein became a registered sex offender, at least some JPMorgan employees were convinced that serving him was in the bank’s interest. (A JPMorgan spokesman said the bank regretted doing business with Epstein but denied responsibility for his crimes.)

Managers had his back

Epstein cultivated a number of senior JPMorgan executives, but none more than Jes Staley, who ran JPMorgan’s huge investment-banking division. For years, he argued for preserving the bank’s relationship with Epstein.

Staley and Epstein were unusually close. Staley visited Epstein’s far-flung properties. They referred to each other as family in emails. Staley sent his daughter to Epstein for career advice and dished confidential information — about the bank’s acquisition plans and its negotiations with the Fed, among other topics — to the sex offender while he was incarcerated. At one point, Staley had sex with a woman who worked at Epstein’s Manhattan townhouse and later accused Epstein of forcing her to engage in commercial sex with his friends.

When bank executives grew uncomfortable with Epstein’s activities at the bank and pushed to remove him as a client, they had to make their case to Staley. At the time, he was the front-runner to become the bank’s next chief executive, and it is easy to imagine executives worrying that having a fight with Staley about his friend would be an unwise career choice.

The C.E.O. didn’t intervene

Jamie Dimon, arguably the most powerful man on Wall Street, has said under oath that he doesn’t recall knowing anything about Epstein until federal prosecutors charged him with sex trafficking in 2019.

Staley, however, said in a sworn deposition that he had talked about Epstein with Dimon. And my colleagues and I found hints that Dimon might have been in the loop, including email traffic among JPMorgan employees that said Epstein’s accounts might be closed “pending Dimon review.”

One thing is clear: Dimon, well known for his tendency to micromanage, was disengaged when it came to one of his bank’s most controversial clients. He didn’t encourage his subordinates to rein in Epstein or end the relationship. When his top lieutenants disagreed about whether to keep doing business with him, Dimon didn’t get involved. Nor, he says, was he aware that the bank’s top compliance executive and its top lawyer both wanted Epstein out.

And so for at least 15 years, JPMorgan kept serving Epstein. Read more about its internal deliberations here.

WHAT’S YOUR SIGN?

Thought it was Virgo season? Think again.

The Zodiac signs were originally based on our view of the stars from Earth. But over thousands of years, that view has shifted. For example, Sept. 8 (today) is in Virgo because 2,000 years ago, the constellation Virgo was more or less behind the sun on that date. But the actual constellation behind the sun today is Leo.

Use our tool to see your (astronomically accurate) zodiac sign, and learn why the signs no longer line up with the constellations they’re named after.

THE LATEST NEWS

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International

The gunmen who killed at least five people in Jerusalem this morning were “neutralized” at the scene, the Israeli police said. Local news reports said two men had opened fire on bus passengers at a junction.
A drone attack by Houthi militants in Yemen shut down an airport in southern Israel. An Israeli alert system failed to raise alarms about the incoming assault.
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Russia is campaigning to sway elections in the small European nation of Moldova. The Trump administration has cut support for the country’s fight against Russian influence.

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Releasing older prisoners would cut the prison population and keep Americans safe, German Lopez argues.

People concerned with tackle football’s gladiatorial style should consider flag football, which is relatively safe and friendly to female athletes, Mary Pilon writes.

Here are columns by David French on the use of military force and Ezra Klein on a government shutdown.

MORNING READS

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Your pick: The most clicked story in yesterday’s newsletter was the preview of 27 coming novels.

A political boss: John Burton, who died at 92, was one of the most influential figures in California politics. He and his allies helped pick or mentor state leaders including Nancy Pelosi and Kamala Harris.

SPORTS

Tennis: By beating Sinner in the U.S. Open final, Alcaraz reclaimed the world No. 1 ranking.

N.F.L.: The Bills and Josh Allen engineered a stunning comeback over the Ravens and Lamar Jackson to win 41-40 on Sunday Night Football.

M.L.B.: Ben Rice of the Yankees hit a 380-foot three-run homer in the first inning after Cody Bellinger realized that the Blue Jays starter Max Scherzer was tipping his changeup.

MTV VIDEO MUSIC AWARDS

The MTV Video Music Awards aired last night and leaned into nostalgia. Doja Cat’s performance threw it back to the 1980s. Ricky Martin lived la vida loca again as the recipient of the inaugural Latin Icon Award. And Busta Rhymes and Mariah Carey received honors.

Here are the most memorable moments and the best looks.