Hedge fund manager Jeffrey Epstein has been dead for almost four years – but the question of who might have helped run his sex trafficking ring continues to rage in the courts. Deutsche Bank has now agreed to a $75 million settlement payment, like that Wall Street Journal wrote on Wednesday evening. In doing so, the bank aims to settle a class action lawsuit alleging it profited financially from Epstein’s sex trafficking ring, the newspaper reported, citing lawyers for the plaintiffs. Deutsche Bank had previously requested that the lawsuit be dismissed. An insider confirmed the comparison. The bank declined to comment.
In November 2022, a group of unnamed women accused both Deutsche Bank and the US bank JP Morgan of having benefited financially from Epstein. The banks gave Epstein the appearance of legitimacy through their services and thus also encouraged the abuse of numerous young women. The women had filed two separate lawsuits in federal district court in New York seeking class status.
The question behind this is: should JP Morgan and later Deutsche Bank have taken on a dubious client like the later convicted sex offender Epstein and managed his assets? The New York banking regulator said no to this question in 2020 and, among other things, imposed a fine of 150 million dollars on Deutsche Bank. For justification At the time, the bank supervisors even explained which managers were involved when the money house accepted Epstein as a customer – but without naming names. Epstein was a customer of Deutsche Bank from 2013 to 2018, a “serious mistake,” as CEO Christian Sewing later admitted. Since then, the bank has invested heavily to improve internal controls.
In 2019, Epstein was arrested on suspicion of sex trafficking, more than a decade after he pleaded guilty in a Florida court to the forced prostitution of a minor. His death in prison in August 2019 was ruled a suicide. His confidante Ghislaine Maxwell was sentenced to 20 years in prison last summer.
The women’s lawsuit is not the first civil lawsuit: Last fall, the bank agreed to pay $26 million in a lawsuit with investors. The plaintiffs, who traded in the bank’s stock between 2018 and 2020, threw the bank lax anti-money laundering controls. The institute has presented advances in this area far too positively, which has driven the share price up. The bank has claimed that risky customer relationships are consistently terminated. Instead, executives overruled concerns raised by compliance staff in the asset management department, the plaintiffs say. When the bank was fined for its relationship with Epstein and other offenses, the stock price fell, hurting investors.
A comparison is still pending at JP Morgan. The major bank has even filed a lawsuit against its former top manager Jes Staley to hold him liable for any damages that could arise in connection with Epstein. Staley was CEO of British bank Barclays until 2021 and had to resign in the wake of the Epstein investigation. At the end of May even JP Morgan boss Jamie Dimon has to to testify under oath in the two civil trials.
At Deutsche Bank, Epstein was a client of the super-rich division, where ex-President Donald Trump was also a client. At that time, the money house really wanted to expand in the USA. With assets in excess of $560 million at one point, Epstein was a key client. At the bank, manager Michele Faissola was in charge of wealth management when Epstein became a client in 2013. From 2015, the current CEO Sewing was temporarily responsible for the division, followed by Fabrizio Campelli, now investment bank board member. Faissola said he was never involved in any decision regarding the customer relationship with Epstein nor did he know that Epstein was a customer until it was mentioned in the press. An internal investigation reportedly found no wrongdoing. It is not publicly known whether Sewing and Campelli knew anything about the customer relationship. The bank does not want to comment officially on this.
Why did the supervisory board and management board not inform the shareholders about the comparison at the institute’s general meeting on Wednesday? The bank declined to comment on that either. When asked by a shareholder about Epstein, it was said that the customer relationship had been examined by a committee in the USA that neither Sewing nor Campelli had belonged to, but not by the risk committee at the group’s headquarters in Frankfurt.