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- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By Aly McDevitt2024-03-21T16:00:00
For major financial institutions, multiple risk factors affect whether to keep or exit a high-risk relationship with an ultrawealthy client.
“Reputational risk, risk of class-action lawsuits, and regulatory risk are the three big ones,” said Karim Rajwani, an independent anti-financial crime consultant.
The Jeffrey Epstein-related lawsuits filed and regulatory penalties levied against JPMorgan Chase and Deutsche Bank bear out the significance of these categorical risks. The price tag of doing business with Epstein was in the hundreds of million for both institutions—not including the cost of remedial measures, such as internal investigations and monitorships, and the financial consequences of reputational damage.
Neither Deutsche Bank nor JPMorgan responded to requests for comment on these settlements.
It is clear both institutions retained the Epstein relationship for too long. In class-action lawsuits, both banks were accused of acting in reckless disregard of the fact the Epstein sex-trafficking venture used means of force to coerce young girls and women to engage in commercial sex acts.
Yet, there is a case to be made for why exiting a high-risk relationship too soon can become an inverse form of recklessness.
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2023-09-26T16:59:00Z By Kyle Brasseur
JPMorgan Chase agreed to pay $75 million as part of a settlement with the government of the U.S. Virgin Islands regarding the bank’s ties to convicted sex offender Jeffrey Epstein.
2023-06-12T16:38:00Z By Kyle Brasseur
JPMorgan Chase announced it reached an agreement in principle to settle claims made in a class-action lawsuit regarding the bank’s ties to convicted sex offender Jeffrey Epstein.
2023-05-18T21:00:00Z By Aaron Nicodemus
Deutsche Bank agreed to pay $75 million to settle a class-action lawsuit filed by sexual assault victims of Jeffrey Epstein.
2024-03-20T16:00:00Z By Aly McDevitt
Why did JPMorgan Chase retain Jeffrey Epstein for more than a dozen years? How did the relationship persist despite glaring red flags? The “why” is straightforward; the “how” is more complicated.
2024-03-19T16:00:00Z By Aly McDevitt
Jeffrey Epstein’s designation as a high-risk client should have subjected him to enhanced due diligence that never appeared to occur, most notably at Deutsche Bank. Instead, Epstein was allowed to continue his misconduct despite numerous red flags.
2024-03-18T16:00:00Z By Aly McDevitt
Why were decisions made the way they were at the banks that serviced Jeffrey Epstein? Evidence points to a cultural tension: a tug-of-war between the allure of profit and the drag of compliance, with the former having all the pulling power.
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