Latest / Beyond The Horizon / JP Morgan And Their Unredacted Opposition To Jes Staley Dismissing The Lawsuit (Part 3) (9/12/26)

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JP Morgan And Their Unredacted Opposition To Jes Staley Dismissing The Lawsuit (Part 3) (9/12/26) · Beyond The Horizon

• 0:00
  Speaker 1: What's up everyone and welcome back to the Epstein Chronicles.
• 0:03
  Speaker 1: In this episode we're picking up where we left off
• 0:06
  Speaker 1: with the J.P. Morgan, USVI, and Jess Staley paperwork. Part 3.
• 0:13
  Speaker 1: Staley's additional attacks on JPMC's indemnity claims are meritless. A.
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  Speaker 1: Delaware law and JPMC's bylaws empower JPMC to bring an
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  Speaker 1: indemnity claim against Staley on these facts. As a bank
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  Speaker 1: governed by Delaware law, JPMC unquestionably has the authority to
• 0:32
  Speaker 1: bring this lawsuit, motion example A, Delaware law section 7.06,
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  Speaker 1: as it can sue and be sued in all courts.
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  Speaker 1: Delaware code, annual title, 8 section 122.2. The very provision
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  Speaker 1: of Delaware law that addresses JPMC's ability to identify its
• 0:51
  Speaker 1: officers from third-party claims expressly contemplates an action by the
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  Speaker 1: corporation against its officers, and prohibits any identity that officers
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  Speaker 1: adjudge liable to the corporation, Delaware Code, Title VIII, Section 145B.
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  Speaker 1: And nothing in Delaware law limits JPMC's ability to bring
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  Speaker 1: or restrict the claims it may assert in a lawsuit
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  Speaker 1: against a former officer who has acted in bad faith. C.
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  Speaker 1: O'Connor v. Seaboard, Communications Corporation, 32, Delaware CH 143-144-82A.2D 102-102-1951,
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  Speaker 1: observing that an insolvent corporation has an asset in the
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  Speaker 1: form of cause of action and possible cause of actions
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  Speaker 1: against its former officers and directors for breach of duty
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  Speaker 1: under Delaware law. The controlling state law plainly empowers JPMC
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  Speaker 1: to bring this lawsuit against Daley. Staley protests, however, that
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  Speaker 1: JPMC's indemnity claim is foreclosed by JPMC's bylaw offering indemnification
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  Speaker 1: to officers involved in litigation to the fullest extent permitted
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  Speaker 1: by law. Motion example A at section 5.01. But Staley
• 2:03
  Speaker 1: fails to explain what the fullest extent means. Indeed, Delaware
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  Speaker 1: law limits such indemnity to cases in which the person
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  Speaker 1: acted in good faith and in a manner the person
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  Speaker 1: reasonably believed to be or not opposed to the best
• 2:16
  Speaker 1: interests of the corporation. Delaware Code, Title VIII, Section 145A,
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  Speaker 1: ID at Section 145B. And the governing Delaware statute expressly
• 2:26
  Speaker 1: prohibits a corporation from identifying an officer or employee who
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  Speaker 1: acted in bad faith or contrary to the interest of
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  Speaker 1: the company. C. Von Felt v. Stifel Financial Corporation, 1991 W.L., 41-3393,
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  Speaker 1: Act 2, Delaware Chamber of Commerce, June 11, 1999. It
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  Speaker 1: should now be clear that as far as Section 145
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  Speaker 1: is concerned, Delaware corporations lack the power to identify a
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  Speaker 1: party who did not act in good faith or in
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  Speaker 1: the best interest of the corporation. Waltuk v. Conta Commodity Services, Inc.,
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  Speaker 1: 88 F. 3D, 87, 93 Second Circuit, 1996. The Delaware Good
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  Speaker 1: Faith Clause must mean that there is no power to
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  Speaker 1: identify Waltuk if he did not act in good faith.
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  Speaker 1: A corporate fiduciary acts in bad faith when motivated by
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  Speaker 1: a purpose other than that of advancing the best interests
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  Speaker 1: of the corporation and its stockholders. In Dole Food Company, Inc.,
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  Speaker 1: Stockholder Litigation, 2015 WL505-2214 at 39. Here, JPMC's third-party complaint
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  Speaker 1: alleges that Staley repeatedly abandoned the interests of JPMC and
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  Speaker 1: served his own and Epstein's interests. JPMC complained at 17
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  Speaker 1: and continuously breached his fiduciary duty acting against the interests
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  Speaker 1: of JPMC and in his own personal interests and benefits
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  Speaker 1: and those of Epstein. JPMC's general identification provision clearly do
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  Speaker 1: not require JPMC to identify Staley for the conduct alleged
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  Speaker 1: in this lawsuit. None of the cases that Staley cites
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  Speaker 1: take place in the context of such Delaware bylaws and
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  Speaker 1: are therefore in opposite. C. Servant Sign Erectors Company v.
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  Speaker 1: Allied Outdoor Advertisement Inc. 573 NYS 2D 513 514 1st
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  Speaker 1: Apartment 1991 B. Doe and USVI's attempts to claim direct
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  Speaker 1: liability against JPMC do not preclude JPMC's identification claims against Staley.
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  Speaker 1: Staley also contends that identification is inappropriate because he disputes
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  Speaker 1: that Doe and USVI seek to hold the JPMC vicariously
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  Speaker 1: liable as a result of Staley's actions. Motion at 13
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  Speaker 1: and 14. But that position misconstrues the Doe and USVI complaints,
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  Speaker 1: ignoring their repeated reliance on Staley's alleged actions to assert
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  Speaker 1: that his employer, JPMC, is responsible for the plaintiff's injuries.
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  Speaker 1: Doe's amended complaint invokes Staley's 97 times and repeatedly alleges
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  Speaker 1: that JPMC knew of or participated in Epstein's sex trafficking
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  Speaker 1: venture through Staley. CEG DOE FAC 135, 164, 200, 205,
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  Speaker 1: and 206, 230 and 231, 239, 327, 328, and 360.
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  Speaker 1: And the USVI's second amended complaint likewise mentioned Staley 41 times,
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  Speaker 1: citing and reproducing Numerous emails between Staley and Epstein to
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  Speaker 1: provide a basis for its claims against JPMC. See USVI
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  Speaker 1: Docket 120, USVI SAC 52-63. Even more, Doe asserts repeatedly
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  Speaker 1: that Staley's previously undisclosed conduct was within the scope of
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  Speaker 1: his employment, with the goal of imputing Staley's actions and
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  Speaker 1: knowledge to his employer, JPMC. Doe FAC 203-205-226. See Docket 102,
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  Speaker 1: Opinion and Order at 29 and 30. And both Doe
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  Speaker 1: and the USVI seek to hold JPMC liable for retaining
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  Speaker 1: Epstein as a client, a decision that was directly and
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  Speaker 1: approximately caused by Staley's active concealment of Epstein's wrongdoing, even
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  Speaker 1: when JPMC asked him to offer his view as to
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  Speaker 1: whether JPMC should retain Epstein as a client. In short,
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  Speaker 1: both plaintiffs invoke agency law to hold JPMC responsible for
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  Speaker 1: their employee Staley's knowledge and actions, thereby giving rise to
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  Speaker 1: JPMC's claim for identification or contribution against Staley. To be sure,
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  Speaker 1: Doe and USVI also allege that JPMC is responsible for
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  Speaker 1: their injuries based on other conduct. But JPMC vigorously disputes
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  Speaker 1: those allegations and it's premature to foreclose JPMC from seeking
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  Speaker 1: indemnity at this stage. Whether JPMC is liable because of
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  Speaker 1: Staley's actions, how Staley influenced others, or otherwise are questions
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  Speaker 1: to be resolved as the litigation proceeds. For that reason,
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  Speaker 1: Staley's contention that there are no allegations he was aware
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  Speaker 1: of Epstein's alleged cash withdrawals or Bank Secrecy Act compliance
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  Speaker 1: issues misses the point. C. Staley's scope of employment argument
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  Speaker 1: is misguided. Staley also argues that JPMC's identification claim must
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  Speaker 1: be dismissed because it seeks to hold Mr. Staley accountable
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  Speaker 1: for actions outside the scope of his responsibilities at the bank.
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  Speaker 1: Motion at 14. But while JPMC argues that many of
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  Speaker 1: Staley's alleged inappropriate activities, criminal and otherwise, fall outside his
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  Speaker 1: employment scope, JPMC complained 42. Doe explicitly alleges that Staley
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  Speaker 1: was acting within that scope when he visited Epstein, both
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  Speaker 1: in New York and the USVI, used the massage room
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  Speaker 1: at Epstein's residence, met many of Epstein's trafficking victims, including
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  Speaker 1: Jane Doe No. 1, and personally observed the sexual abuse
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  Speaker 1: of young women, including Jane Doe No. 1. Given the
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  Speaker 1: party's competing factual allegations, Staley's attempt to dismiss the indemnity
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  Speaker 1: claim at this early stage should be rejected. See Beauchamp v.
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  Speaker 1: City of New York, 771, NYS. 2D, 129, 131, 2nd Department, 2004.
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  Speaker 1: Riviello v. Waldron, 47, NY, 2D, 297, 303, 1979. Whether
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  Speaker 1: Staley did or did not personally make the decision to
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  Speaker 1: retain Epstein at JPMC is irrelevant to JPMC's identity claim
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  Speaker 1: and misses the point. Motion at 14 and 15. Staley
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  Speaker 1: kept JPMC in the dark along the same lines the
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  Speaker 1: good faith efforts of other employees at JPMC who made
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  Speaker 1: the final call were unmistakably and unknowingly influenced by Staley's
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  Speaker 1: failure to report material information, whether criminal or not, while
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  Speaker 1: vouching for Epstein and his character The worst of Staley's
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  Speaker 1: alleged conduct involving Epstein, including rape, was undoubtedly outside the
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  Speaker 1: scope of his employment. But JPMC would plainly be entitled
• 9:16
  Speaker 1: to identify if the court finds that Staley's failure to
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  Speaker 1: disclose information or his other misconduct gives rise to vicarious
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  Speaker 1: liability for JPMC. Part 4. JPMC has stated a claim
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  Speaker 1: for contribution. Contribution is available where two or more tortfeasors
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  Speaker 1: combine to cause an injury and is determined in accordance
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  Speaker 1: with the relative culpability of each such person. Internal quotation
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  Speaker 1: marks and citations omitted. As Staley acknowledges, motion at 15.
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  Speaker 1: Internal quotation marks and citations omitted. See NYCPLR Section 1401.
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  Speaker 1: As Staley acknowledges, motion at 15, JPMC states a claim
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  Speaker 1: for contribution if it alleges that Staley breached the duty
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  Speaker 1: to plaintiffs or JPMC. His breach caused the injury, and
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  Speaker 1: the injury is the same for which JPMC is allegedly liable,
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  Speaker 1: Bellis v. Tokyo Marine and Fire Insurance Company Ltd., 2002
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  Speaker 1: WL 193 149 at 17 SDNY 2002 JPMC's third-party complaint
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  Speaker 1: adequately states a contribution claim. It incorporates the allegations of
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  Speaker 1: Doe and USVI accusing Staley of observing specific trafficking victims
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  Speaker 1: including Doe, raping Doe, and engaging in conduct that suggests
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  Speaker 1: participation in Epstein's sex trafficking scheme. CEG JPMC Compliance 22
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  Speaker 1: and 33 JPMC's third-party complaint makes clear that if those
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  Speaker 1: allegations are true, Staley caused harm to Doe and the
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  Speaker 1: USVI by concealing his improper conduct while vouching for Epstein's
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  Speaker 1: character within JPMC, a direct and proximate cause of JPMC's
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  Speaker 1: decision to continue to do business with Epstein until 2013.
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  Speaker 1: As Staley acknowledges, JPMC may base its contribution claim on
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  Speaker 1: Staley's duty to JPMC, motion at 15. Thus, Staley's contention
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  Speaker 1: that there is no allegation that Staley owed a duty
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  Speaker 1: to Doe or the USVI is irrelevant. Idea 15. JPMC
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  Speaker 1: complaints 17, 37, and 58. And his assertions that JPMC
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  Speaker 1: failed to adequately to allege Staley breached his fiduciary duty
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  Speaker 1: is mistaken. Staley's contention that JPMC has not adequately pled
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  Speaker 1: that Staley caused the same harm as JPMC supposedly did
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  Speaker 1: fares no better. JPMC's impleter complaint makes it clear that
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  Speaker 1: Staley's concealment of his alleged conduct and knowledge of Epstein's activities,
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  Speaker 1: along with vouching for Epstein and his character within JPMC,
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  Speaker 1: resulted in Epstein's continued retention as a JPMC client. CEG
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  Speaker 1: JPMC Complaint 36-42. Per Doe and USVI, JPMC's retention of
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  Speaker 1: Epstein enabled a sex trafficking venture, which caused their injuries.
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  Speaker 1: Any suggestion that this injury is somehow separate and distinct
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  Speaker 1: Motion at 16 is spacious. Staley argues that the crux
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  Speaker 1: of plaintiff's complaints is that JPMC provided the financial lifeblood
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  Speaker 1: of Epstein's sex trafficking venture, which is a different sort
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  Speaker 1: of misconduct than Staley engaged in. But even if that
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  Speaker 1: were true, it would be of no consequence. Contribution of
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  Speaker 1: rules apply to third-party action, even though the respective liabilities
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  Speaker 1: of the parties might rest on different grounds, since the
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  Speaker 1: same inquiry to defendant is involved in each instance. Crowe, Crimmins, Wolfe,
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  Speaker 1: and Munier v. Westchester County, 455 NY S2D 390-391, 2nd Department, 1982.
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  Speaker 1: That JPMC's alleged liability may be based on different grounds,
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  Speaker 1: thus does not foreclose its contribution claim for the plaintiff's injuries. Alright,
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  Speaker 1: we're going to wrap up this episode right here, and
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  Speaker 1: in the next episode, we're going to pick up with
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  Speaker 1: Part 5. JPMC's breach of fiduciary duty and faithless servant
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  Speaker 1: causes of action would survive dismissal of the identification and
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  Speaker 1: contribution claims. All of the information that goes with this
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  Speaker 1: episode can be found in the description box.