JPMorgan Chase (NYSE: JPM) has reached a $75 million settlement with the U.S. Virgin Islands to resolve allegations that the bank aided Jeffrey Epstein's sex trafficking activities.
This settlement comes ahead of the scheduled trial in Manhattan and follows nearly a year of legal battles.
Epstein, a convicted sex offender, maintained dozens of accounts at JPMorgan's private bank and regularly communicated with top bank executives.
Both sides argued that the other failed to identify Epstein's alleged crimes and turned a blind eye to his actions, the Wall Street Journal reports.
In 2019, JPMorgan reviewed its connections with Jeffrey Epstein and discovered that Epstein had provided frequent business advice to Jes Staley, a former JPMorgan executive.
Sergey Brin, who co-founded Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) Google with Larry Page, was one of the biggest clients landed through the connection between Epstein and JPMorgan in 2004.
The legal battle drew in bank executives, including CEO Jamie Dimon, and officials from the U.S. Virgin Islands, leading to the disclosure of embarrassing emails and documents.
Court records revealed that Epstein exchanged photos of young women with a top JPMorgan executive, Jes Staley, among other details.
The settlement, while significant, is less than half of the $190 million initially sought by the U.S. Virgin Islands.
Additionally, JPMorgan reached a separate settlement with Jes Staley. The bank had sued Staley, alleging that he covered up for Epstein.
JPMorgan will pay $30 million to charities in the Virgin Islands working on human trafficking issues, $25 million to support government and law enforcement efforts against human trafficking, and $20 million for legal fees.
The bank stated it deeply regrets any association with Epstein and committed to combat human trafficking as part of the settlement.
This latest settlement follows a $290 million agreement by JPMorgan to resolve a separate class-action lawsuit on behalf of Epstein accusers. Deutsche Bank AG (NYSE: DB), which also had dealings with Epstein, reached a $75 million settlement with Epstein accusers earlier this year.
The settlements have brought in more than $240 million for the U.S. Virgin Islands, including funds from Epstein's estate and private equity founder Leon Black, another Epstein client.
Attorney General Ariel Smith of the Virgin Islands emphasized that the settlement is a historic victory for survivors and highlights banks' responsibilities to detect and prevent human trafficking.
Price Action: JPM shares traded lower by 0.89% at $145.15 on the last check Tuesday.