A federal judge on Thursday approved a settlement of a class-action lawsuit in which JPMorgan Chase will pay $290 million to sexual abuse victims of Jeffrey Epstein who claimed that the bank ignored warnings about the disgraced financier.
The money being paid by JPMorgan, the nation’s biggest bank, could provide compensation to nearly 200 victims of Mr. Epstein, according to a legal filing. JPMorgan and lawyers for the victims reached a preliminary settlement in June, averting a potential civil trial in federal court in Manhattan.
The judge, Jed Rakoff, gave final approval to the deal after holding an afternoon hearing to assess the fairness of the settlement to the victims. The settlement closes an important chapter in the Epstein saga centering on the role of big banks in enabling his conduct to continue for nearly two decades.
Fifteen unidentified victims submitted written declarations in support of the deal. Some, including one who said she was just 13 when Mr. Epstein first sexually assaulted her, wrote about continuing to suffer from depression, anxiety, panic attacks and eating disorders.
Attorneys general from 16 states and Washington, D.C., raised concerns about some of the settlement’s language in a letter to the judge. They said a broad release given to JPMorgan might preclude some states from bringing their own sex-trafficking claims under a federal law that permits state governments to file civil lawsuits on behalf of sexual-abuse victims.
But Judge Rakoff said that the issue raised by the attorneys generals was a hypothetical one and that he found no issue with the settlement language.
“This case sent a message through this very substantial settlement that banking institutions have a responsibility,” Judge Rakoff said.
The judge said that given the large amount of money to be disbursed to victims, he had directed the administrator of the settlement fund to send him periodic confidential reports on her work.
The settlement between Mr. Epstein’s victims and JPMorgan resolves a lawsuit filed last November on behalf of victims whom Mr. Epstein sexually abused over roughly 15 years ending in 2013. The lawsuit claimed JPMorgan had ignored repeated red flags that Mr. Epstein was trafficking teenage girls and young women for sex, even after he pleaded guilty in a 2008 Florida case to soliciting prostitution from a teenage girl.
The lawsuit was one of two civil suits arising from JPMorgan’s dealings with Mr. Epstein, who killed himself in 2019 in a federal jail in Manhattan, roughly a month after his arrest on sex trafficking charges. In September, the bank agreed to pay $75 million to the U.S. Virgin Islands to settle claims that it did nothing to deter a sex-trafficking operation that Mr. Epstein ran from his private island in the U.S. territory.
The bank reached both settlements after months of embarrassing disclosures about how top JPMorgan executives kept Mr. Epstein as a client despite numerous warning signs.
Judge Rakoff approved an application by the two law firms that brought the class-action litigation against the bank — Boies Schiller Flexner and Edwards Henderson Lehrman — to keep 30 percent of the settlement as legal fees. The firms also will be reimbursed $1.1 million out of the settlement money for litigation expenses, according to a court filing.
The two law firms received a similar 30 percent cut of a $75 million settlement they negotiated with Deutsche Bank, which provided banking services to Mr. Epstein in the years after JPMorgan dismissed him as a client in 2013.