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Guilty or not guilty: Deutsche Bank is ready to pay $75 million in Epstein settlement

  • Deutsche Bank hasn’t come clean about its involvement with the Epstein crime. However, the bank addressed the situation by saying that it has strengthened and invested in its anti-financial crime controls.
  • Upstart is up almost 80% in 2023 so far. The news of multiple funding agreements being worked on by the company rebounded the stock nearly 47% in a week.
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Guilty or not guilty: Deutsche Bank is ready to pay $75 million in Epstein settlement

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Guilty or not guilty: Deutsche Bank is ready to pay $75 million in Epstein settlement


Guilty or not guilty: Deutsche Bank is ready to pay a whopping $75 million in Epstein settlement

Deutsche Bank's spokesman declined to comment on the matter but referred to a 2020 statement in which the bank admitted its oversight on onboarding Epstein as its client.

by SARA KHAIRI

In March, US District Judge Jed Rakoff in Manhattan ruled that two big banks -- Deutsche Bank and JPMorgan Chase -- had to face trial on October 23 for participating in and oiling the wheels for late financier Jeffrey Epstein's criminal activities involving the sexual exploitation of underage girls.

Judge Rakoff further instructed authorities to analyze other aspects -- including whether the banks turned a blind eye to the sex-trafficking venture on purpose to reap financial rewards by Epstein, breaching the Trafficking Victims Protection Act.

On May 18, Deutsche Bank agreed to pay $75 million to settle the high-profile litigation that claimed that the bank was in the know about Epstein's offenses, according to attorneys for the plaintiff identified as Jane Doe. This settlement resolves allegations against Deutsche Bank, which maintained Epstein as its client from 2013 to 2018, in Manhattan federal court.

“The settlement will allow dozens of survivors of Jeffrey Epstein to finally attempt to restore their faith in our system knowing that all individuals and entities who facilitated Epstein’s sex-trafficking operation are finally being held accountable,” said lawyers at Edwards Pottinger, one of the firms representing the plaintiff.

According to Edwards Pottinger, this is likely the highest sex-trafficking settlement with a bank in US history.

"This groundbreaking settlement is the culmination of two law firms conducting more than a decade-long investigation to hold one of Epstein’s financial banking partners responsible for the role it played in facilitating his trafficking organization," Edwards Pottinger said in a common declaration with the Boies Schiller Flexner law firm.

Deutsche Bank hasn’t come clean about its involvement with the crime. However, the bank addressed the situation by saying that it has strengthened and invested in its anti-financial crime controls.

“In recent years Deutsche Bank has made considerable progress in remedying a number of past issues, including investing more than 4 billion euros to bolster our controls as well as training and operational processes,” Dylan Riddle, a spokesman for the bank, said in a press statement. “Further, we’ve increased the size of our anti-financial crime team to 1,900 employees.”

JPMorgan is still at loggerheads with the allegations against it and continues to fight its individual suit filed by the government of the US Virgin Islands in the US District Court in Manhattan. 

Tesla CEO Elon Musk is among others who have been subpoenaed in the JPMorgan litigation -- as Musk may have been referred to JPMorgan by Epstein, says the court filing. However, the Virgin Islands did not provide further clarity in obtaining documents from Musk in this regard.


Market recap

Fintech stocks were in oscillation this week

Upstart (UPST) - up 47% to $24.59 per share

  • As of Thursday's close, Upstart shares have jumped nearly 47% higher since last Thursday's close -- up almost 80% in 2023 so far.
  • Upstart released its first-quarter results -- despite the revenue dropping 67% from the first quarter of 2022 to $103 million, the news of multiple funding agreements being worked on by the company rebounded the stock this week.
  • "Despite the headwinds facing our industry, we secured multiple long-term funding agreements, together expected to deliver more than $2 billion to the Upstart platform over the next 12 months," said CEO Dave Girouard.
  • Last Monday, Upstart and investment management company Castlelake inked a purchase deal for Castlelake to acquire as much as $4 billion of consumer installment loans from Upstart

Capital One (COF) - up 14% to $99.23 per share

  • Shares of Capital One rebounded from two weeks of losses after investor Warren Buffett's Berkshire Hathaway disclosed it had taken a stake of nearly $1 billion in the bank.
  • Berkshire acquired 9.92 million shares in Capital One, a stake worth $954 million based on the closing price on March 31, according to regulatory filings.

Editor's picks


Tweet of the week


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Fintech IPO Index gains 2.4% as Upstart soars on consumer loan sale

PYMNTS

The fintech IPO gathered 2.4% in a week that saw the last few remnants of earnings reports trickle in. Upstart saw its shares soar 48% through the past five sessions -- after Castlelake along with co-investor and minority partner Eltura Capital Management, struck a pact to buy as much as $4 billion worth of consumer loans from Upstart.

Citi builds an embedded payments suite with POS installment loans and lines of credit

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Citi Retail Services is boosting its embedded payments capabilities by enabling merchants to offer lines of credit and installment loans at the point of sale. The first offering is Citi Pay Credit, a digital-only credit card and dedicated line of credit for customers to make purchases at participating retailers. This will be followed in the next few months by the Citi Pay Installment Loan, which will let shoppers make purchases through monthly payments over a period of six to 60 months, based on the retailer.

Coinbase officially opens subscription service; expands reach outside the U.S.

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Coinbase took its zero-fee subscription service Coinbase One out of beta testing and expanded it from just the U.S. to also include the U.K., Germany, and Ireland. For $29.99 per month, customers don’t pay trading fees and also get higher staking rewards. The service had been in beta testing since 2021. Coinbase aims to further widen its international reach, with plans to offer Coinbase One in 35 countries.

‘Rumours and misconceptions’ to blame for SVB failure, claims ex-CEO

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In his first public remarks since Silicon Valley Bank collapsed, the lender’s former CEO pointed the finger at pretty much everybody but himself, casting blame on regulators, the media, his board of directors, and even the bank’s own depositors. Gregory Becker, who was fired from SVB shortly after its March failure, repeatedly said that SVB’s unwinding was unforeseeable but senators took a sharper view of his decision-making.

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