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Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
JPMorgan and its Directors Win Dismissal of Derivative Suit Over Alleged Epstein Connection
- Client News
- August 9, 2023
Paul, Weiss secured a significant victory for JPMorgan and its directors when the Southern District of New York dismissed a pension fund’s derivative suit alleging that our clients breached fiduciary duties of oversight in connection with former JPMorgan client Jeffrey Epstein's criminal activity.
In their lawsuit filed in May, plaintiffs alleged that JPMorgan enabled Epstein’s conduct when he was a “star client” from 1998 through 2013, during which the bank purportedly serviced accounts tied to Epstein, allegedly used to pay his victims and his associates. Alleging breach of fiduciary duty, the plaintiffs claimed that the board failed to ensure that the bank was meeting its obligations under federal laws, including obligations to submit suspicious activity reports.
In our motion to dismiss filed in July, we argued that the plaintiffs failed to plead that the majority of the board was conflicted, such that a demand made to the board would have been futile. We argued that plaintiffs failed to offer facts that any of the director defendants consciously disregarded red flags concerning Epstein’s accounts and banking activity, that any of them even knew that Epstein was a client, or that the directors failed to implement controls. We also argued that the complaint failed to state claims as a matter of law for similar reasons.
U.S. District Judge Jed Rakoff agreed with our arguments, dismissing the suit “on the ground that plaintiffs have failed to make pre-suit demand on the board of directors of JPMorgan or adequately allege that doing so would be futile.”
The Paul, Weiss team included litigation partners Audra Soloway, Jessica Carey and Andre Bouchard and counsel Jacobus Schutte.