Why banks kept doing business with Jeffrey Epstein

August 13, 2019

A protest group holds up signs of Jeffrey Epstein in front of a New York City federal courthouse in July 2019, the month before his death.

A protest group holds up signs of Jeffrey Epstein in front of a New York City federal courthouse in July 2019, the month before his death. | Stephanie Keith/Getty Images

Epstein’s case is an example of how banks often prioritize rich clients over other concerns — moral, or even legal — when their bottom line is at stake.

There is a lot of mystery surrounding Jeffrey Epstein before and after his death, including when it comes to how he made his money, or even how big his fortune was. But we do know that some of the biggest banks in the world did business with him, despite reported internal flags about the risks.

The situation sheds light on one of the ugly truths of the banking industry: Firms are sometimes more inclined to ignore red flags, take on risks, or even bend the law than they are to lose a wealthy client.

In Epstein’s case, he appears to have been bringing not only his money to the banks but also many other wealthy connections, and so there was a temptation to look the other way on red flags.

JPMorgan and Deutsche Bank have come under scrutiny amid reports from the New York Times about their dealings with Epstein, the New York financier and convicted sex offender. According to the Times, JPMorgan kept Epstein on as a client well past his 2008 guilty plea for soliciting prostitution and despite recommendations from compliance officers that it cut ties with him because of potential legal and reputational risks associated with his accounts. A similar scenario played out at Deutsche Bank, where, as at JPMorgan, executives reportedly ignored compliance officers’ concerns about suspicious transactions.

According to former regulators, prosecutors, and other experts I spoke with, Epstein’s case is an example of …read more

Source:: Vox – All

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