Bank’s attempt to clawback former executive’s salary could set a Wall Street record

Reported by Joshua Franklin and Stephen Gandel

JPMorgan Chase is attempting to engineer what could be the biggest clawback of pay in Wall Street history by demanding that Jes Staley return more than $80mn for failing to fully disclose the extent of the former executive’s relationship with Jeffrey Epstein.

If successful, the clawback of seven years worth of Staley’s compensation from 2006 to 2013, during which time he was one of the bank’s top executives, could be just the tip of the iceberg of what he has to pay.

JPMorgan is also seeking to make Staley liable for any damages awarded to the US Virgin Islands and one of Epstein’s alleged victims in two high-profile legal cases against the bank, as well as legal fees and damages for any reputational harm. 

It shows the financial hit Staley faces over his association with the late convicted sex offender, which led to his resignation as Barclays chief executive in 2021. The lawsuit is also the most explicit declaration to date by JPMorgan that the bank’s leaders believe Staley protected Epstein’s position as a client and withheld vital information. 

The lawsuits against JPMorgan by the USVI and the alleged Epstein victim claim the bank is liable for facilitating Epstein’s sexual abuse by failing to spot and act on red flags. 

While legal experts cast doubt on the odds of the bank prevailing against Staley, JPMorganis arguing new details have come to light through the two legal cases against the bank.

Read full report: https://www.ft.com/content/0b6d547f-382e-46ed-939f-3f571d90e376