Jeffrey Epstein keeps haunting Wall Street long after his death

Goldman Sachs partners swapped incredulous messages, traded theories and fielded queries from puzzled clients after the revelation two weeks ago of its top lawyer’s ties with Jeffrey Epstein.

But when the bank’s general counsel, Kathy Ruemmler, was hired in 2020, she had told its leadership about her past dealings with the disgraced financier, explaining that he offered the use of his network to help drum up business while she was in private practice.

Goldman Sachs’ general counsel Kathryn Ruemmler has joined an unenviable Wall Street list.Credit: Getty Images

Now, Ruemmler, 52, and Goldman are on an unenviable list of Wall Street names as the industry once again contends with past associations with Epstein. Troves of Epstein records from recent legal battles and documents obtained by The Wall Street Journal show a wide cast of executives and even some firms were willing to work with the money man long after his 2008 conviction for soliciting prostitution from a minor.

They stomached close associations with the well-connected financier despite his criminal record and other serious allegations to benefit from his wealth, Rolodex and influence until his arrest and jailhouse death in 2019.

The result is that executives at companies including Goldman, JPMorgan Chase & Co, Citigroup, Bank of America and Barclays are seeing those connections spill into public view – and in many cases expressing remorse.

After the disclosures, Ruemmler told the Journal “I regret ever knowing Jeffrey Epstein.”

Ruemmler knew Epstein professionally, “and she proactively told Goldman Sachs about that and other business contacts and clients during the hiring process,” a spokesman for the bank said.

“Many of Ms. Ruemmler’s contacts with Mr. Epstein related to a potential representation involving the Gates Foundation, a representation of the Edmond de Rothschild bank which became a long-term client, and other business opportunities.”

Dimon’s lament

That’s now part of the newest phase of the Epstein fallout. Some of his jet-setting with prominent figures came to light around the time of his 2019 arrest. But increasingly, attention is falling on people who tried in quieter ways to do business with or through him.

A pair of lawsuits against JPMorgan – one on behalf of Epstein’s victims and another from the US Virgin Islands, where he lived – have been exploring why the bank and its executives continued handling the sex offender’s money for years after his initial conviction. Plaintiffs argue the company effectively enabled some of his alleged sex-trafficking, which the firm vigorously disputes.

Jeffrey Epstein was found dead in his jail cell in 2019, after being arrested and charged with sex-trafficking by Manhattan federal prosecutors.Credit: AP

In March, JPMorgan sued Jes Staley, its former head of asset management, accusing him of keeping it in the dark about the extent of his relationship with Epstein and shielding the financier from being rejected as a customer. The bank has sought to claw back Staley’s pay and said he should bear any liability for its dealings with Epstein. Staley, in turn, accused the bank of using him as a “public relations shield” and asked a court to dismiss the case.

The litigation has forced JPMorgan executives, including wealth management chief Mary Erdoes, to answer questions about why the firm held on to Epstein’s business for about five years after his first conviction. Erdoes isn’t named as a defendant.

“I am so sad that we had any relation to that man whatsoever,” JPMorgan chief executive officer Jamie Dimon said last week. He said the bank would have done things “differently” if it had known the full scope of Epstein’s actions and behaviour.

In March, JPMorgan sued Jes Staley, its former head of asset management, accusing him of keeping it in the dark about the extent of his relationship with Epstein and shielding the financier from being rejected as a customer.Credit: AP

‘Rough system’

At Citigroup, Paul Barrett, a senior private banker, exited the company after it was reported that he scheduled five meetings with Epstein between 2014 and 2017 when he was at JPMorgan. “Until recently, Citi was unaware of Paul Barrett’s association with Jeffrey Epstein, which predated his employment at our firm,” a spokesperson for Citigroup said in a statement. “Mr. Barrett is no longer employed by Citi.”

And at Bank of America a wealth adviser was recently deposed about his relationship with Epstein when he was at JPMorgan and Deutsche Bank AG. A Bank of America spokesperson declined to comment on his behalf.

Leon Botstein, the president of Bard College, repeatedly pursued Epstein to raise money for his college. He wouldn’t do that again, he said.

“You cannot pick and choose, because among the very rich is a higher percentage of unpleasant and not very attractive people. Capitalism is a rough system,” he said in a statement, repeating remarks made earlier this month. He now describes Epstein as a monster and truly evil man.

Apartment hunt

Yet some of the most heavily documented meetings in the Wall Street Journal’s Epstein files are tied to Goldman’s Ruemmler.

The former Justice Department prosecutor and Obama White House counsel built her ties with Epstein after heading into private practice in 2014. She went on to become the chair of the white-collar defence and investigations practice at Latham & Watkins.

She told Goldman executives that Epstein had respected her advice, and that she provided him informal guidance without taking him on as a client, one of the people said, asking not to be named discussing the confidential talks.

The Journal reported on April 30 that Epstein’s calendar shows Ruemmler had more than three dozen meetings scheduled with him in the years before his death, including plans to visit apartments she was looking to purchase. She was also present at his arraignment in 2019 when he was charged with multiple sex crimes, sitting close to his legal camp even though she was not representing him, two of the people said.

The Goldman spokesman declined to comment about her presence at the arraignment or the apartment hunting.

Lucrative post

Goldman’s general counsel office has been an institution inside the firm, jousting with governments as the bank pursued lucrative opportunities around the world that could invite extra attention. Greg Palm served as its top in-house lawyer for nearly three decades until 2019, spanning an era of spectacular growth.

As the bank finally sought a successor, Ruemmler was in the running and even had the backing of top executives. But then-chief executive Lloyd Blankfein picked Sullivan & Cromwell’s Karen Seymour.

By 2020, under chief executive David Solomon’s leadership, Goldman brought Ruemmler into the fold. A year later, the firm elevated her to general counsel as Seymour returned to Sullivan & Cromwell. Ruemmler soon emerged as one of the highest-paid in-house corporate lawyers in the industry, with Goldman awarding her $US17.5 million ($26.1 million) for her work in 2021, her first full year.

This March, the board praised her in materials for its annual shareholder meeting, saying she has “exhibited exceptional judgment and provided sound counsel.”

Bloomberg

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