NEW YORK--A U.S. judge said on Monday JPMorgan Chase & Co and Deutsche Bank AG must face lawsuits accusing them of enabling Jeffrey Epstein's sex trafficking.
The decision by U.S. District Judge Jed Rakoff in Manhattan could expose the banks to additional financial and reputational damage for keeping Epstein as a client, even after the late financier registered as a sex offender.
In a six-paragraph order, Rakoff said JPMorgan must face a lawsuit by the U.S. Virgin Islands accusing it of missing red flags about Epstein's abuse of women on Little St. James, a private island he owned there.
The judge also ruled that both banks must face proposed class actions by women who said Epstein sexually abused them. He said he would explain his reasoning in due course.
Rakoff's decision gives the plaintiffs a chance to prove that JPMorgan and Deutsche Bank knowingly benefited from involvement in Epstein's sex trafficking. The women can also try to show that the banks were negligent and obstructed enforcement of a federal anti-trafficking law.
Brad Edwards, a lawyer for the women, said damages in a scheduled October trial covering more than 300 Epstein victims could total billions of dollars. The JPMorgan cases drew added attention when Jes Staley, formerly JPMorgan's private banking chief, was accused of swapping sexually suggestive messages about young women with the financier, and committing sexual assault himself.
