The DOJ’s indictment includes photos of classified documents found at former President Donald Trump’s Mar-a-Lago residence.
DOJ
Donald Trump was hit Thursday night with three new federal criminal charges, and a third defendant was added to the case where the former president already was accused of dozens of felonies related to retaining classified documents at his Florida residence after leaving the White House.
Trump, the front-runner for the 2024 Republican presidential nomination, is charged in a new superseding indictment with his valet, Walt Nauta, over an alleged attempt to delete video surveillance footage at his Mar-a-Lago club in Palm Beach, Florida, during the summer of 2022.
At that time, federal officials were seeking the return of government records they suspected of being kept at that location.
Trump is also newly accused of retaining a classified document detailing a U.S. military plan of attack on Iran, which Trump showed to a writer, publisher and two staff members at his club in Bedminster, New Jersey, on July 21, 2021.
At the time, Trump had not been president for six months, and his guests “did not have security clearances” to view the document, according to the superseding indictment in U.S. District Court for the Southern District of Florida.
Carlos de Oliveira, the third defendant added to the case against Trump and Nauta, is head of maintenance at Mar-a-Lago.
De Oliveira allegedly told another Mar-a-Lago employee that “the boss” wanted to delete a server containing surveillance footage showing how Trump’s boxes had been moved around at the club, according to the superseding indictment.
The new charging document also identifies de Oliveira as the person who helped Nauta move about 30 boxes from Trump’s residence to a storage room.
He also allegedly told the FBI he was not involved in moving documents that officials sought, telling agents, “Never saw anything.”
Former U.S. President Trump appears on classified document charges after a federal indictment at Wilkie D. Ferguson Jr. United States Courthouse, alongside his attorney Chris Kise in Miami, Florida, U.S., June 13, 2023 in a courtroom sketch.
Jane Rosenberg | Reuters
The new charges against Trump include an additional count of willful retention of national defense information and two new counts of obstruction against both him and Nauta.
The new obstruction counts relate to the alleged efforts by Trump, Nauta and de Oliveira to delete Mar-a-Lago security camera footage that was sought by a federal grand jury in June 2022.
With the new charges, Trump now faces 40 criminal counts in the case, which was first lodged in early June by Department of Justice special counsel Jack Smith.
The most serious counts against Trump carry 20-year maximum prison terms.
De Oliveira, 56, was charged Thursday with conspiracy to obstruct justice, altering destroying, mutilating a document and false statements.
The updated indictment against former President Donald Trump, Walt Nauta and Carlos De Oliveira is photographed Thursday, July 27, 2023.
Jon Elswick | AP
The false statements charge relates to the voluntary interview De Oliveira gave FBI agents in January.
Trump, who is seeking the 2024 Republican presidential nomination, stored hundreds of government documents at Mar-a-Lago after he left office, and according to prosecutors took steps to keep them hidden from U.S. officials seeking their return.
Trump and Nauta have pleaded not guilty in the case. A trial in the case has been scheduled for May, just months before the general election.
John Irving, a lawyer for de Oliveira, declined to comment, according to NBC News.
De Oliveira has been ordered to appear in Miami federal court on Monday for his first hearing in the case.
Peter Carr, a spokesman for Smith, said in a statement, “Today, a superseding indictment was returned by a grand jury in the Southern District of Florida that adds one defendant and four charges to the prior indictment filed against Donald J. Trump and Waltine Nauta.”
Trump spokesman Steven Cheung slammed the DOJ over the new charges. “This is nothing more than a continued desperate and flailing attempt by the Biden Crime Family and their Department of Justice to harass President Trump and those around him,” he said in a statement.
“Deranged Jack Smith knows that they have no case and is casting about for any way to salvage their illegal witch hunt and to get someone other than Donald Trump to run against Crooked Joe Biden,” Cheung said.
Smith separately is overseeing a criminal investigation of Trump related to his efforts to undo his 2020 electoral loss to President Joe Biden. The special counsel last week informed Trump that he is a target in that probe, a notification that typically occurs before the target is charged in a case.
A grand jury that has been hearing testimony and reviewing evidence in that case in U.S. District Court in Washington, D.C., ended a session Thursday afternoon without issuing an indictment.
Trump faces other legal issues. In spring, a Manhattan grand jury charged him with falsifying business documents related to a hush money payment to porn star Stormy Daniels. In Georgia, meanwhile, a local district attorney is probing the former president over his attempt to overturn his 2020 electoral loss in that state.
Correction: Donald Trump had not been president for six months on July 21, 2021. An earlier version misstated the time frame.
A former Morgan Stanley financial advisor has been sentenced to more than seven years in prison after admitting he ran a $7 million Ponzi scheme at the firm for more than a decade.
But even though the scam targeted Morgan Stanley clients and the advisor admitted using a Morgan Stanley product to carry it out, the firm has fought efforts to hold it responsible.
Victims say not only has Morgan Stanley resisted their efforts to recover money from the firm, it is also continuing to hold them responsible for lines of credit that the advisor fraudulently convinced them to open. Morgan Stanley is America’s sixth-largest brokerage firm, with more than $1.3 trillion under management. The firm made $11 billion in profits last year.
“I can liken the whole process to being assaulted in a back alley while you’re on mind-altering drugs like roofies,” said Caitlin Andrews, 43, of Carolina Beach, North Carolina, a single mother of two boys who lost $1.7 million, or virtually her entire net worth. “And then one day you wake up in the police station and you have to watch the video again and again and go over bank statements of when things happened and listen to phone calls again and again. It’s traumatizing.”
The advisor, Shawn Edward Good, was a vice president in Morgan Stanley’s Wilmington, North Carolina, office from 2012 until early last year, when he was abruptly fired after the scam came to light. Last September, he pleaded guilty in federal court to one count of money laundering and one count of wire fraud.
Prosecutors said that Good, 56, conned at least a dozen clients into paying him more than $7.24 million that they thought was going toward “low risk” investments. Good instructed them to borrow against their portfolios using a Morgan Stanley product known as a Liquidity Access Line of Credit, transfer the money to him and he would take care of the rest.
“Access the cash you need to fund your goals, with the strength of Morgan Stanley behind you,” says a corporate video touting the Liquidity Access Line of Credit.
But instead of investing the funds as promised, Good spent the money on homes, luxury cars, European vacations and payments to multiple women. Investigators found electronic money transfers with memo lines such as “Hotel for Destiny,” “because youre [sic] sexy” and “Nailz.” By the time the scam came to light in 2022, he had racked up $800,000 in credit card bills, according to court filings.
“Shawn Good spent that money to prop up a lavish lifestyle,” Michael F. Easley Jr., U.S. attorney for the Eastern District of North Carolina, said in an interview. “It was a hallmark of somebody who every single day of their life chose greed over good.”
The use of the Morgan Stanley lines of credit gave the transfers an air of legitimacy.
“So, effectively, Morgan Stanley is lending money to the victims of this scheme and that money then gets diverted into Shawn Good’s pocket,” Easley said.
But it also meant that while they were unwittingly funding Good’s scam, the victims also were on the hook for interest to Morgan Stanley for as much as $2,000 per month.
“Shawn Good convinced them he would get enough return that he could make money and pay back his liquidity access loan principal and interest and still come out ahead,” Easley said. “That didn’t happen.”
Prosecutors said that in addition to the money he spent on himself, Good used some of it to pay other investors, in a classic Ponzi scheme.
On May 24, a federal judge in Raleigh sentenced Good to 87 months in prison and ordered him to pay more than $3.6 million in restitution. It’s not nearly enough to make the victims whole, prosecutors and victims said. And because of the nature of the scam, much of the money Good pilfered is long gone.
That is where Morgan Stanley comes in. Some of Good’s clients filed arbitration claims against the firm — standard account agreements bar brokerage customers from suing in court. The victims alleged that the firm failed to reasonably supervise its employee.
“I think any other brokerage firm would have detected this activity,” said attorney Marc Fitapelli of New York, who represents Andrews and her mother. Andrews’ mother also lost everything she had, roughly $1 million.
The arbitration process, under the auspices of the Financial Industry Regulatory Authority, is confidential. While the firm settled with at least one client under undisclosed terms, Fitapelli said Morgan Stanley has pushed back against claims that it was somehow responsible for Good’s actions. And several of Good’s victims said the firm is still holding them to their lines of credit, and it is still charging them interest.
One victim, Charles Hayward of Wilmington, said that means he has no choice but to keep his account at Morgan Stanley to this day.
“It’s awful hard to pay that debt off to move my money away, or I just give them all my money and then move whatever’s left away,” he said.
According to a court filing, Hayward lost $150,000 in the scam.
Morgan Stanley, which topped earnings expectations Tuesday thanks in large part to its wealth management business, declined an interview request. In a statement, a spokesperson for the firm said: “After discovering Mr. Good’s fraud, he was promptly terminated from Morgan Stanley. We have and will continue to cooperate fully with law enforcement and other authorities and to work with counsel for Morgan Stanley clients to address their claims.”
It wasn’t Morgan Stanley that discovered Good’s fraud, according to multiple law enforcement sources. These sources said that federal and state investigators in North Carolina, who were looking into Good’s finances, began contacting his clients early last year. One of those customers was the first to alert the firm. Only after Good refused to be interviewed by investigators did Morgan Stanley fire him.
After this article was first published, a Morgan Stanley spokesperson offered an additional statement.
“The fraud committed by Shawn Good was conducted outside Firm systems and involved transfers to Good that were made from client accounts held elsewhere,” the statement said.
Nonetheless, the statement said, the firm “has worked with all clients who have raised claims to amicably resolve them.”
Earlier this month, the firm reached an agreement in principle with Caitlin Andrews and her mother to settle their claims.
Caitlin Andrews said she began investing with Good in 2014, opening her Morgan Stanley account with approximately $1.7 million from a divorce settlement. She said that she saw no reason not to trust him. Good was already handling her mother’s investments, and before that he had worked with her grandmother.
“He just seemed really invested in our family,” she said. “He just seemed very trustworthy and friendly.”
But more important than all of that, she said, was that he worked for Morgan Stanley.
“Morgan Stanley does the homework about who they hire,” she said. “And he isn’t just some guy on a street corner with a sign.”
Caitlin Andrews, Morgan Stanley client
CNBC
Andrews said that she stressed to Good from the outset that the money was everything that she had. As a single mother, her earning power was limited.
“It’s what I lived off of, it’s what I paid groceries off of, it’s what I paid my mortgage off of,” she said, explaining what she told Good. “It was my sons’ college education, it was health insurance, it was everything.”
Eventually, she said, Good pitched her on a plan that would allow her to leverage her holdings to invest in an Airbnb in her beach-side community, earning her extra income with minimal risk.
“I’ve got a high yield, low risk bond that pays out every three months. So, in three months, you’re going to get $15,000 and that would be great for this bathroom,” she said he told her. “And then in the next three months, $15,000 will be great for, you know, that kitchen upgrade.”
Good would arrange for the purchases through her Liquidity Access Line of Credit. What she said she had not understood, as a novice investor, was that the funds for the bonds were going from her line of credit into Good’s personal account.
It wasn’t until early last year that she had any idea something was wrong. That’s when investigators from the IRS and the North Carolina State Bureau of Investigators contacted her about the money transfers from her brokerage account to Good.
“I remember one of the women was really nice, and she said, ‘Do you know that you are missing X amount of money?’” Andrews recalled. “And I said, ‘No, I’m not.’”
She said she then pulled up her account on her phone, and it showed her holdings were still there. But then the agent instructed her to scroll down to the section about her line of credit.
“If you go down to how much I owed, no, I didn’t have any money,” Andrews said. At that point, the agent started crying, she said. “And I knew that when the law enforcement agent starts crying on your behalf, that things are really bad.”
Filled with adrenaline and confusion, Andrews said she decided to confront Good and record the whole thing. The phone conversations would eventually become part of the court record.
“How do we know it’s not a Ponzi scheme?” she is heard asking Good on Feb. 2, 2022.
“It’s not! I mean, I mean, the money’s there. It’s coming back. It’s not,” he said.
“OK, and I’m going to trust you because you work at Morgan Stanley. And you should know these things,” Andrews replied.
But by this point, Good was no longer touting his Morgan Stanley credentials. That became even clearer in Andrews’ second phone call to Good a week later.
“I want my money. And I want it in my hands,” Andrews told Good on Feb. 9, 2002. “I have two boys. I am their only parent. This is all of my money. And you took it!”
“And you have it all, Caitlin. You have it all, we will get it all transferred back,” Good replied.
But, he said, “If they go to Morgan Stanley, they will fire me. I mean, I will lose my job.”
On the recordings, Good can be heard telling Andrews that going to the firm, or even contacting an attorney, would “hamstring” his efforts to get her money back. And in the recordings he is heard instructing her to correspond with him using a private email address and not his Morgan Stanley account.
Good’s efforts to hide his scam from Morgan Stanley do not absolve the firm, said Louis Straney, a 43-year veteran of the securities industry who consults in arbitration cases but isn’t involved with this one.
“They should have detected it and prevented it at the outset,” said Straney, the founder and managing partner at Arbitration Insight in Santa Fe, New Mexico. “They should have been more proactive. Because the red flags, the alerts were there.”
According to court filings, Good’s cars included a 2010 Lexus RX350, a 1997 Porsche Boxster, a 2019 Tesla Model 3 and a 2018 Alfa Romeo Stelvio. His travel destinations included France, Italy, Spain, and the Netherlands. Straney said Good’s lifestyle alone should have been a dead giveaway.
“As a supervisor, you’re looking at the advisors that work for you and determining whether or not their lifestyle matches their income,” he said. “I managed some of the best and largest producers at my firm, and none of them had a lifestyle that matched this, not one.”
The fact that virtually all of Good’s clients had opened lines of credit and they were actively using them was a second red flag.
“You really have to justify why they’re borrowing,” Straney said.
Morgan Stanley office in Wilmington, N.C. where Good worked.
CNBC
It was also not the first time that employees went behind Morgan Stanley’s back using unofficial channels, and the firm failed to notice.
Last year, the firm paid a $125 million fine to the Securities and Exchange Commission after admitting to the “widespread and longstanding failure of Morgan Stanley employees throughout the firm” to follow rules prohibiting “off-channel communications” on personal devices and messaging apps as far back as 2018, following an investigation that began in 2021.
Morgan Stanley was among 16 firms charged, all admitting they violated federal securities laws. Specifically, the SEC said that communicating outside of official channels violates recordkeeping provisions of the law, thwarting the agency’s ability to guard against fraud.
Fitapelli said that meant the firm was already on notice about the same kind of conduct Good was engaging in.
“The activity that they’re being fined for is exactly what happened,” he said. “And, so, the harm is foreseeable.”
Caitlin Andrews was Good’s biggest victim, according to court filings.
She said the fraud upended her life. She was forced to move with her boys into the cottage, still under construction, that she had been planning to turn into an Airbnb. With no money to pay her contractors, she is trying to do the construction by herself, bit by bit. The family has no health insurance and with no money for child care, she can’t work a full-time job.
“The stress on me is understandable. But what I hate is the amount of stress on my kids,” she said. “I try to be strong. I think I am strong, and I try to talk about it, not cover it up, but at least not let it bleed into everything. But the children know exactly what’s happening and how their life has changed.”
Andrews said that at one point, she even considered suicide, and was saved only by her love for her children, as well as a therapist who insisted on treating her for free.
“You’re just in this dark void of empty abandonment, because you’re abandoned by your financial advisor who took everything. You’re abandoned by the firm whose commitment is to help you,” she said.
At his sentencing hearing in May, a disheveled-looking Good said “there’s no excuse” for what he did, and that “the guilt and remorse is overwhelming.”
Several of his victims spoke at the sentencing, as well, all describing how Good stole not only their money but also their trust.
“He took my boys out for ice cream while he was stealing their college funds,” Andrews told the judge.
Not in court, nor anywhere near it, was anyone from Morgan Stanley.
If you or someone you know is in crisis, call 988 to reach the Suicide and Crisis Lifeline.
A federal judge in San Francisco has denied the Federal Trade Commission’s motion for a preliminary injunction to stop Microsoft from completing its acquisition of video game publisher Activision Blizzard.
The deal isn’t completely in the clear, though. The FTC can now bring the decision to the U.S. Court of Appeals for the 9th Circuit, and the two companies must find a way forward to resolve opposition from the Competition and Markets Authority in the United Kingdom.
“This Court’s responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action,” Judge Jacqueline Scott Corley wrote in her decision, published Tuesday. “For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED.”
Microsoft CEO Satya Nadella arrives at court in San Francisco on June 28, 2023.
Shelby Knowles | Bloomberg | Getty Images
Activision Blizzard shares reached a session high and 52-week high of $92.91 per share after the U.S. District Court for the Northern District of California issued the decision. Microsoft had agreed to buy the game publisher for $95 per share. Activision Blizzard stock ended Tuesday’s trading session at $90.99 per share, up 10%.
“We’re optimistic that today’s ruling signals a path to full regulatory approval elsewhere around the globe, and we stand ready to work with UK regulators to address any remaining concerns so our merger can quickly close,” Activision Blizzard CEO Bobby Kotick wrote in a memo to employees.
Microsoft also hailed the decision.
“We’re grateful to the court in San Francisco for this quick and thorough decision and hope other jurisdictions will continue working towards a timely resolution,” Brad Smith, Microsoft’s president and vice chair, said in a statement. “As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”
The decision comes after five days of court hearings to assess whether Microsoft would be able to complete the $68.7 billion Activision Blizzard acquisition it announced in 2022. The judgewas deciding whether to grant the FTC’s request for an emergency injunction to prevent the deal from closing.
The FTC argued Microsoft has shown an interest in making some games exclusive, to prevent them from appearing on Sony’s PlayStation or Nintendo’s Switch, and that it might do so if the deal were to close. But Microsoft said the company would want to make Activision’s titles more widely available, rather than less, partly to grow from people subscribing to its Game Pass library of games. Kotick and Microsoft CEO Satya Nadella both testified, as did executives from Alphabet, Nvidia and Sony.
In December the FTC filed suit to block the deal and have an administrative law judge at the agency assess it. But in June, before that could happen, the FTC requested a preliminary injunction to prevent Microsoft from completing the acquisition, with an eye toward bringing the case to its administrative law judge on Aug. 2. The two companies were looking to close the deal by July 18.
“We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles. In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers,” an FTC spokesperson said.
Kotick said during the hearings that the Activision Blizzard board didn’t see how the deal could continue if the judge were to grant the preliminary injunction.
The judge modified the temporary restraining order she imposed in June so that it ends at 11:59 p.m. on July 14, unless the FTC gets a stay pending appeal from the 9th Circuit.
Meanwhile, the two companies are turning their attention back toward Europe.
“After today’s court decision in the U.S., our focus now turns back to the UK. While we ultimately disagree with the CMA’s concerns, we are considering how the transaction might be modified in order to address those concerns in a way that is acceptable to the CMA,” Smith said in a statement. “In order to prioritize work on these proposals, Microsoft and Activision have agreed with the CMA that a stay of the litigation in the UK would be in the public interest and the parties have made a joint submission to the Competition Appeal Tribunal to this effect.
Microsoft and the CMA have agreed on a small divestiture to address the regulator’s concerns, CNBC’s David Faber reported.
The flag of Thailand flies over Bangkok on May 13, 2023, on the eve of the general election.
Jack Taylor | Afp | Getty Images
Veteran politician Wan Muhamad Noor Matha of Thailand’s Prachachart Party looked set to be confirmed as speaker of the new House of Representatives after being the only name put forward for the post on Tuesday.
Wan Noor’s nomination is seen widely as a compromise between the two biggest parties and alliance partners Move Forward and Pheu Thai, which have been at odds over the crucial post.
As the only nomination, no house vote is required to endorse Wan Noor. The house speaker position was sought because the holder can influence the passage of key legislation and the timing of votes.
The compromise over house speaker could help to defuse some tensions between the two biggest parties which had jostled for weeks over the speakership.
“I will conduct duties fairly … with transparency in considering draft laws and petitions to improve the lives of all Thais,” Wan Noor said after his nomination.
Once he takes up the post, among his first tasks will be to table a vote of the bicameral parliament on a prime minister to form the next government.
The progressive Move Forward and populist Pheu Thai parties trounced their conservative and pro-military rivals in the May 14 poll, winning 151 and 141 seats respectively, in what was seen as a resounding rejection of nine years of government led or backed by the army.
Move Forward and Pheu Thai have formed an alliance with six other parties.
The ruling is a massive blow to decades-old efforts to boost enrollment of minorities at American universities through policies that took into account applicants’ race.
“Eliminating racial discrimination means eliminating all of it,” wrote Chief Justice John Roberts in the majority opinion, which all five of his fellow conservative justices joined in.
Roberts wrote said that both Harvard’s and UNC’s affirmative action programs “unavoidably employ race in a negative manner, involve racial stereotyping, and lack meaningful end points.”
“We have never permitted admissions programs to work in that way, and we will not do so today,” Roberts wrote, finding that the universities’ policies violated the equal protection clause of the Constitution’s 14th Amendment. The clause bars states from denying people equal protection under the law.
Protesters gather in front of the U.S. Supreme Court as affirmative action cases involving Harvard and University of North Carolina admissions are heard by the court in Washington on Monday, October 31, 2022.
Bill Clark | Cq-roll Call, Inc. | Getty Images
The chief justice added, however, that “nothing prohibits universities from considering an applicant’s discussion of how race affected the applicant’s life, so long as that discussion is concretely tied to a quality of character or unique ability that the particular applicant can contribute to the university.”
Justice Clarence Thomas, a Black conservative who wrote a concurring opinion, said that the schools’ affirmative action admissions policies “fly In the face of our colorblind Constitution.”
“Two discriminatory wrongs can not make a right,” wrote Thomas.
In her dissent to the majority, liberal Justice Ketanji Brown Jackson, who is Black, called the ruling “truly a tragedy for us all.”
Her fellow liberal, Justice Sonia Sotomayor, said, “Today, this Court stands in the way and rolls back decades of precedent and momentous progress.”
Sotomayor, calling the ruling “profoundly wrong” and “devastating,” said that the majority “holds that race can no longer be used in a limited way in college admissions to achieve such critical benefits.”
U.S. Supreme Court Justice Sonia Sotomayor
Getty Images
In doing so, she argued the Supreme Court “cements a superficial rule of colorblindness as a constitutional principle in an endemically segregated society where race has always mattered and continues to matter.”
Thursday’s ruling dealt with two separate, but related cases, one for Harvard, the other for UNC.
In the Harvard case, the vote on the decision was 6-2, with Jackson taking no part in considering the case. Jackson last year during her Senate confirmation hearings agreed to recuse herself in the case involving Harvard, whose Board of Overseers she served on until early 2022.
Proponents for affirmative action in higher education rally in front of the U.S. Supreme Court before oral arguments in Students for Fair Admissions v. President and Fellows of Harvard College and Students for Fair Admissions v. University of North Carolina on October 31, 2022 in Washington, DC.
Chip Somodevilla | Getty Images
In the UNC case, the vote was 6-3, with Jackson participating in considering the case and dissenting with Sotomayor and Justice Elena Kagan, the court’s third liberal.
President Joe Biden said, “The court has effectively ended affirmative action in college admissions, and I strongly, strongly disagree with the court’s decision.”
“Discrimination still exists in America,” Biden said at the White House, repeating that phrase several times. “Today’s decision does not change that.”
Asked by a reporter if “this a rogue court,” Biden paused at a door he was about to exit through, and was silent for several seconds.
“This is not a normal one,” Biden finally said.
People exit Harvard Yard in Cambridge, Massachusetts, on June 29, 2023.
Joseph Prezioso | AFP | Getty Images
Harvard in a lengthy statement said, “We will certainly comply with the Court’s decision.”
But the statement added, “In the weeks and months ahead, drawing on the talent and expertise of our Harvard community, we will determine how to preserve, consistent with the Court’s new precedent, our essential values.”
Harvard, which began classes in 1636, did not admit Black undergraduates until 1847, the university noted.
UNC Chancellor Kevin Guskiewicz, in a statement, said, “Carolina remains firmly committed to bringing together talented students with different perspectives and life experiences and continues to make an affordable, high-quality education accessible to the people of North Carolina and beyond.”
“While not the outcome we hoped for, we will carefully review the Supreme Court’s decision and take any steps necessary to comply with the law,” Guskiewicz said.
Jean Camejo, a student at the University of North Carolina, speaks on campus to Reuters about affirmative action as the Supreme Court weighs the issue of race-conscious admissions to colleges, in Chapel Hill, North Carolina, U.S., March 28, 2023.
Jonathan Drake | Reuters
Former President Donald Trump, who is seeking the 2024 Republican presidential nomination, in a statement said, “This is a great day for America.”
“We’re going back to all merit-based — and that’s the way it should be!” said Trump, who graduated from the Wharton School at the University of Pennsylvania, an Ivy League school like Harvard, after growing up the son of a wealthy New York real estate developer.
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In a footnote to the majority opinion in the case, Roberts indicated that the decision does not apply to the United States military academies.
The Biden administration had filed a legal brief arguing that race-based admissions to American colleges further “compelling interests” at the military academies, Roberts noted.
“No military academy is a party to these cases, however, and none of the courts below addressed the propriety of race-based admissions systems in that context,” he wrote. “This opinion also does not address the issue, in light of the potentially distinct interests that military academies may present.”
NAACP CEO Derrick Johnsonblasted the ruling, saying in a statement, “Today the Supreme Court has bowed to the personally held beliefs of an extremist minority.”
“We will not allow hate-inspired people in power to turn back the clock and undermine our hard-won victories,” said Johnson.
“The tricks of America’s dark past will not be tolerated. Let me be clear – affirmative action exists because we cannot rely on colleges, universities, and employers to enact admissions and hiring practices that embrace diversity, equity and inclusion. Race plays an undeniable role in shaping the identities of and quality of life for Black Americans.”
Some of those deleted emails were sought by subpoenas in at least a dozen regulatory investigations, but could no longer be retrieved, the SEC order against J.P. Morgan Securities LLC noted.
Others “could relate to potential future investigations, legal matters and regulatory inquiries,” the order said.
The emails, which were accidentally deleted in 2019, were from and to about 8,700 email boxes, which included those of up to 7,500 employees who had regular contact with Chase customers.
Many of the emails were “business records required to be retained pursuant” to federal securities law, the order said.
J.P. Morgan Securities consented to the SEC sanction, which also censured the firm.
The firm had submitted a settlement offer in anticipation of administrative proceedings related to the deletions, and the SEC accepted that offer.
The SEC also ordered the firm to “cease and desist from committing any future violations” of the securities law requiring broker-dealers to retain for at least three years the originals of all communications.
This is the third time the investment advisor has agreed to punishment for failing to preserve electronic records.
The firm in late 2021 agreed to pay $125 million in penalties for failing to preserve text messages and other electronic communications sent between January 2018 and November 2020.
In 2005, the firm paid $700,000 in penalties for not preserving electronic records from mid-1999 to mid-2002.
JPMorgan spokeswoman Patricia Wexler declined to comment on the latest sanction.
In its order Thursday, the SEC noted JPMorgan in 2016 began a project “to delete from its system older communications and documents no longer required to be retained.”
Those messages included old emails, instant messages and communications sent over the Bloomberg terminal service.
But there were “glitches” in the project, “with the identified documents not, in fact, being expunged,” the order said.
While troubleshooting that issue in June 2019, employees of the firm “executed deletion tasks on electronic communications from the first quarter of 2018,” the order said.
Those employees “erroneously” believed — based on claims by the firm’s archiving vendor — that all of those documents were coded in a way to prevent the permanent deletion of those records that were required by law to be kept for three years, the order said.
“In fact, however, the vendor did not apply the default retention settings in a particular email domain,” the order said.
“And those communications, including many required to be maintained pursuant to the broker-dealer recordkeeping rules, were permanently deleted.”
Those deletions were discovered in October 2019, when a JPMorgan team responsible for producing records related to legal cases detected that emails were missing from early 2018, the order said.
JPMorgan reported the deletions to the SEC in January 2020.
The order noted that, “In at least twelve civil securities-related regulatory investigations, eight of which were conducted by the [SEC] Commission staff, JPMorgan received subpoenas and document requests for communications which could not be retrieved or produced because they had been deleted permanently.”
And, the order added, “JPMorgan notified only one of the eight investigative teams at the Commission that its production in response to the subpoenas had been compromised by the 2019 deletion event.”
The order noted that because the deleted communications “are unrecoverable, it is unknown – and unknowable – how the lost records may have affected the regulatory investigations.”
In fact, a member of JPMorgan’s compliance department acknowledged in an internal email after the deletions came to light that “lost documents could relate to potential future investigations, legal matters and regulatory inquiries,” the order said.
The groups asked the court to declare the program unconstitutional and prevent the Department of Health and Human Services from implementing Medicare negotiations without “adequate procedural protections” for drug manufacturers.
HHS did not immediately respond to CNBC’s request for comment.
It marks the fourth lawsuit challenging the controversial provision of the Inflation Reduction Act, which became law last summer in a major victory for President Joe Biden and Democratic lawmakers.
The policy aims to make drugs more affordable for older Americans but will likely reduce pharmaceutical industry profits. Merck and Bristol Myers Squibb — who are also represented by PhRMA — and the U.S. Chamber of Commerce filed separate lawsuits against the provision earlier this month.
The latest lawsuit argues the plan delegates too much authority to the HHS.
PhRMA and the two organizations also argue that the provision includes a “crippling” excise tax aimed at forcing drugmakers to accept the government-dictated price of medicines, making it an excessive fine prohibited by the Eighth Amendment.
The lawsuit also argues the policy violates due process by denying pharmaceutical companies and the public input on how Medicare negotiations will be implemented.
“The price setting scheme in the Inflation Reduction Act is bad policy that threatens continued research and development and patients’ access to medicines,” PhRMA CEO Stephen Ubl said in a statement.
“It also violates the U.S. Constitution because it includes barriers to transparency and accountability, hands the executive branch unfettered discretion to set the price of medicines in Medicare and relies on an absurd enforcement mechanism to force compliance,” Ubl said.
The first 10 drugs the provision applies to will be chosen in September, with the agreed prices taking effect in 2026.
In this photo illustration, boxes of the diabetes drug Ozempic rest on a pharmacy counter on April 17, 2023 in Los Angeles, California.
Mario Tama | Getty Images
Novo Nordisk on Tuesday sued five medical spas and wellness clinics for allegedly selling cheaper, unauthorized versions of the company’s weight loss drugs Ozempic and Wegovy.
The Danish drugmaker initiated the lawsuits in federal courts in New York, Texas, Florida and Tennessee, according to complaints obtained by CNBC.
The suits accused the spas and clinics of marketing and selling “compounded” drug products that claim to contain semaglutide, the active ingredient in both Ozempic and Wegovy. Compounded drugs are custom-made versions of a treatment that are not approved by the Food and Drug Administration.
Novo Nordisk is the sole patent holder of semaglutide and does not sell that ingredient to outside entities. It’s unclear what the spas and clinics are actually selling to consumers.
Novo Nordisk asked the courts for orders blocking the sales of the unauthorized drugs and an unspecified amount of money damages.
“These unlawful marketing and sales practices, including the use of Novo Nordisk trademarks in connection with these practices, have created a high risk of consumer confusion and deception as well as potential safety concerns,” the company wrote in a press release Tuesday.
The spas and clinics named in the lawsuits include Pro Health Investments, Champion Health & Wellness Clinics and Flawless Image Medical Aesthetics.
It also includes Effinger Health, which operates as Nuvida Rx Weight Loss, and Ekzotika Corp., which is doing business as Cosmetic Laser Professionals Med Spa. The latter clinic offers a $30 Groupon for a one-week “semaglutide weight management program.”
The spas and clinics didn’t immediately respond to CNBC’s requests for comment.
The suits come amid a shortage of Wegovy and Ozempic, which has led to a boom in compounded alternatives that claim to be the popular injections.
The FDA last month warned about the safety risks of unauthorized versions of Ozempic and Wegovy after reports emerged of adverse health reactions to compounded versions of the drugs.
Several states have also threatened to take legal action against compounding pharmacies that make or distribute unapproved variations of Novo Nordisk’s weight loss treatments.
Harvard Medical School morgue manager, Cedric Lodge, has been accused of stealing human remains donated to the institution to turn a profit.
Lodge, 55, and five others, including his wife Denise Lodge, 63, were indicted by a federal grand jury on conspiracy and interstate transport of stolen goods charges on Wednesday for allegedly participating in a “nationwide network” to buy and sell body parts stolen from cadavers.
As the morgue manager for the Anatomical Gifts Program at the prestigious medical school, Lodge allegedly stole organs and other remains – including heads, brains, skin, and bones – from bodies donated for scientific research before they were cremated from 2018 through 2022, according to the indictment.
Lodge would then transport the remains to his home in Goffstown, New Hampshire, where he and his wife would sell the parts to resellers Katrina Maclean, 44, Joshua Taylor, 46, and other buyers online – often transporting and shipping the remains across state lines. In some instances, Lodge allowed Maclean and Taylor into the morgue to “examine cadavers to choose what to purchase.”
The indictment states that Taylor sent 39 electronic payments via PayPal to Denise Lodge for a total of $37,355.56 between September 2018 and July 2021, with often crude payment memos including “head number 7” and “braiiiiiins.”
After purchasing the remains, Maclean and Taylor would resell the parts for a profit. Maclean allegedly sold the parts in her store Kat’s Creepy Creations in Peabody, Massachusetts, and to frequent buyer Jeremy Pauley, 41.
Pauley also purchased remains from Candace Chapman Scott, who would steal body parts from cadavers donated to the University of Arkansas for Medical Sciences while she worked at a Little Rock mortuary and crematorium.
Pauley would then resell the parts to others, including Matthew Lampi, 52. Records indicate that they would often buy and sell from each other, exchanging over $100,000 in online payments.
Image credit: Photo by Steven Porter/The Boston Globe via Getty Images Former Harvard Medical School morgue manager Cedric Lodge, 55, leaving the Warren B. Rudman United States Courthouse.
Denise Lodge, Maclean, Taylor, and Lampi were also indicted by a federal grand jury on conspiracy and interstate transport of stolen goods charges on Wednesday. Pauley was charged by means of criminal information,while Scott was previously indicted in Arkansas.
Cedric and Denise Lodge and Maclean were arrested by the FBI on Wednesday without incident, according to ABC News, while Taylor entered a not guilty plea.
Cedric was terminated from Harvard Medical School on May 6.
In a statement, the school called the ordeal “morally reprehensible,” and stated that Lodge “acted without the knowledge or cooperation of anyone else at HMS or Harvard.” Lodge was the only one involved in the crime that was affiliated with the Ivy League school. Additionally, Harvard plans to work with investigators to find which donors may have been impacted.
United States Attorney Gerard M. Karam said the school is “also a victim here” in the indictment.
“Some crimes defy understanding,” he said. “The theft and trafficking of human remains strikes at the very essence of what makes us human. It is particularly egregious that so many of the victims here volunteered to allow their remains to be used to educate medical professionals and advance the interests of science and healing. For them and their families to be taken advantage of in the name of profit is appalling. With these charges, we are seeking to secure some measure of justice for all these victims.”
The former CEO of Dippin’ Dots has found himself in trouble with the law.
Scott Fischer, who was CEO of the beaded ice cream brand from 2012 to 2022, was arrested last week when police found him naked and intoxicated after allegedly assaulting his girlfriend.
According to court documents obtained by KOKH, Fischer and his girlfriend (who has not been named) had an argument about his drinking Tuesday, June 6 at their Nichols Hills, Oklahoma home before he went to bed around 5:45 p.m. The argument resumed six hours later and turned physical when Fischer awoke and then allegedly grabbed his girlfriend by the shirt, started choking her, threw her over the couch and began striking her chest with a closed fist. Police found a few drops of blood on one of the couch cushions, KOKH reported.
Fischer’s girlfriend managed to free herself and call 911, but he allegedly interfered with the call and took the phone away from her while she was reporting the incident. She then evacuated the premise.
When police arrived on the scene the 43-year-old businessman was “completely naked with a blank expression on his face” while he stood before them with a “circular sway,” law enforcement told KOKH.
“Fischer had a strong odor of an alcoholic beverage,” police said, and was “unsteady on his feet as we walked him to the patrol vehicle.”
Fischer was booked into Oklahoma County Jail on charges of domestic violence by strangulation, public intoxication, indecent exposure and interfering with an emergency call.
Fischer was released on $10,000 bail, according to court documents obtained by Insider Business.
On Friday, Fischer issued a statement to News 9: “While things may not be as reported, and have been mid-represented. it is a regrettable matter that was not as reported. (sic)”
This incident is not Fischer’s first offense. In 2021, an ex-girlfriend sued him for invasion of privacy, intentional infliction of emotional distress and negligence after he shared nude photos of her without her consent, per KOKH.
Before that, he was arrested for a DUI in 2018 after crashing his car into a powerline pole, driving through an iron fence and striking two homes.
Fischer and his father Mark Fischer acquired Dippin’ Dots out of bankruptcy for $12.7 million in 2012 and sold it to J&J Snack Foods Corp for $222 million in 2022.
Since departing the company after its sale, Fischer appears to have been working for himself as the founder and CEO of Fischer Capital, according to LinkedIn.
JPMorgan Chase is prepared to pay $290 million to resolve claims by victims of the late sexual predator Jeffrey Epstein, a person familiar with the matter told CNBC on Monday.
The settlement does not include an admission of liability by the bank, the person said.
The announcement of the settlement came just hours before a judge ruled that the case in U.S. District Court in Manhattan can proceed as a class-action lawsuit. The bank did not include details about the agreement in that announcement. The person familiar with the deal requested anonymity to discuss the details of the settlement.
“The parties in Jane Doe 1 v. JPMorgan Chase Bank, N.A. have informed the Court that they have reached an agreement in principle to settle the putative class action lawsuit related to Jeffrey Epstein’s crimes, which is subject to court approval,” the bank said in a news release earlier Monday morning.
“The parties believe this settlement is in the best interests of all parties, especially the survivors who were the victims of Epstein’s terrible abuse,” JPMorgan added.
The settlement announcement comes one month after Deutsche Bank, where Epstein became a client after he was forced out by JPMorgan in 2013, settled with Epstein victims for $75 million. JPMorgan’s litigation with the U.S. Virgin Islands is ongoing.
Monday’s settlement stems from claims filed last year by an unnamed woman, using the pseudonym Jane Doe, that the bank knowingly benefited from and facilitated Epstein’s sex trafficking operation. The woman, who alleges she was raped and trafficked, sued on behalf of a “large number” of other victims of that operation.
“We all now understand that Epstein’s behavior was monstrous, and we believe this settlement is in the best interest of all parties, especially the survivors, who suffered unimaginable abuse at the hands of this man,” JPMorgan said in a separate statement Monday morning.
“Any association with him was a mistake and we regret it. We would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes,” the bank said.
Brad Edwards, an attorney for the lead plaintiff in the case, lauded the “enormously valuable” support the Virgin Islands provided to Epstein’s victims. “We recognize the importance of the government’s continued litigation against JPMorgan Chase to prevent future crimes,” Edwards said in a statement.
In a court opinion posted later Monday morning, Judge Jed Rakoff wrote that the plaintiffs meet the requirements to form a class-action suit.
The judge wrote that the pool of alleged victims in the case likely exceeds the 40-person threshold for class certification, rebuffing JPMorgan’s calculation of 32 people with viable claims.
“Even if the proposed class is restricted to people who were sexually abused or trafficked by Jeffrey Epstein after JP Morgan, allegedly, either knew or should have known of Epstein’s sex-trafficking venture, the class likely contains well over 40 people,” Rakoff wrote.
JPMorgan remains headed for an Oct. 23 trial with the U.S. Virgin Islands in its lawsuit over the bank’s relationship with Epstein. JPMorgan’s claims against former executive Jes Staley, who was friends with Epstein, are also active, the bank said. JPMorgan argues that Staley is responsible for any civil liability a jury might find in the Epstein case. It is also looking to claw back more than $80 million in pay from the former executive.
“We are gratified to hear about the settlement that will provide victims of Jeffrey Epstein some compensation for JPMorgan Chase’s role in facilitating Epstein’s crimes against them,” a spokesperson for the Virgin Islands attorney general said in a statement.
“The U.S. Virgin Islands will continue to proceed with its enforcement action to ensure full accountability for JPMorgan’s violations of law and prevent the bank from assisting and profiting from human trafficking in the future. The U.S Virgin Islands is committed to protecting women and girls who could otherwise become victims going forward,” the spokesperson said.
The victim and the Virgin Islands, where Epstein owned a private island where he would sexually abuse girls, both claim JPMorgan continued working with Epstein after learning he had been a predator, and facilitated his sex trafficking crimes. The Virgin Islands’ government, however, is pushing forward, pointing to multiple new exhibits featuring email chains that show more concern within the bank about Epstein than was previously known, especially among its legal and compliance staff.
The announcement comes more than a week after JPMorgan CEO Jamie Dimon gave a deposition in the Epstein cases. On Friday, lawyers for the Epstein victim, called Jane Doe 1 in documents, asked the court to reopen Dimon’s deposition.
The accuser’s lawyers also sought to reopen the depositions of Mary Erdoes, who is CEO of JPMorgan’s asset and wealth management division; Mary Casey, who was Epstein’s banker for about a decade at JPMorgan; and a fourth person, only identified in the filing as JPMorgan’s “representative.” All four would be asked about documents turned over after their initial depositions, according to a filing.
JPMorgan has denied wrongdoing and says it regrets having had Epstein as a client. Dimon had said he barely knew of Epstein until 2019, when federal authorities arrested him.
One of the late-produced documents was a timeline that referenced emails in which Staley, the one-time JPMorgan executive, asks Epstein a question. (Staley left another big bank, Barclays, in late 2021 after a probe into his Epstein relationship.)
“Plaintiff would have confronted JPMC’s CEO, Mr. Dimon, with this document during his deposition had it been produced in a timely manner,” a legal filing said.
JPMorgan has said Dimon did not review Epstein’s accounts when he was a client there from 1998 through 2013, which is when JPMorgan severed its relationship with him. That termination happened years after multiple concerns were raised within the bank about keeping him as a client and five years after he pleaded guilty to a Florida state charge of soliciting sex from a minor.
Epstein died in 2019 from suicide in a New York jail, weeks after federal authorities charged him with trafficking girls for sex.
Despite his criminal history, Epstein nonetheless cultivated friendships and relationships among the richest, most powerful people in the world, including Microsoft co-founder Bill Gates, Prince Andrew of the U.K. and former Presidents Bill Clinton and Donald Trump.
Lawyers for a Jeffrey Epstein victim asked a federal judge on Friday to allow them to take new testimony from JPMorgan Chase CEO Jamie Dimon and others as part of a lawsuit against the bank over its dealings with sex predator Epstein.
The lawyers, who deposed Dimon for the suit last month, alleged in a Manhattan District Court filing that JPMorgan has “strategically” failed to promptly turn over documents to them as part of the case, as required by Judge Jed Rakoff.
That prevented the accuser’s lawyers from asking questions about those documents at the time Dimon and other key witnesses were deposed, according to the filing by attorney Sigrid McCawley.
The filing says that after Dimon’s deposition, JPMorgan “produced 1,500 documents, some of which came from the custodial files of witnesses whose depositions had long passed.”
The accuser, who is suing under the pseudonym Jane Doe, in her suit claims that JPMorgan facilitated and financially benefited from Epstein’s sex trafficking of her and other young women for years when he was a customer of the bank.
Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., right, at the US Capitol following a meeting with Senate Majority Leader Chuck Schumer in Washington, DC, US, on Wednesday, May 17, 2023.
Sarah Silbiger | Bloomberg | Getty Images
The government of the U.S. Virgin Islands alleges the same claim in a separate lawsuit pending in the same courthouse.
JPMorgan denies any wrongdoing but has said it regrets having had Epstein as a client.
In addition to Dimon, the accuser’s lawyers want to reopen the depositions of Mary Erdoes, who is CEO of JPMorgan’s asset and wealth management division; Mary Casey, who was Epstein’s banker for about a decade at JPMorgan; and a fourth person, only identified in the filing as JPMorgan’s “representative.”
All four would be asked about documents turned over only after their initial depositions, the filing said.
One such document, turned over after Dimon’s deposition was taken May 26, “appears to refer to a 2019 internal review of [redacted] electronic communications with Jeffrey Epstein, conducted after Epstein’s 2019 arrest and death,” according to the filing.
One late-produced document was a timeline that among other things referenced emails in which a then-top bank executive Jes Staley asks Epstein a question.
“These documents demonstrate that JPMC was fully capable of learning the full extent of Epstein and Staley’s personal relationship … and yet waited to do so until 2019 despite the myriad red flags and public reports about Epstein’s conduct over the years,” the filing said.
“Plaintiff would have confronted JPMC’s CEO, Mr. Dimon, with this document during his deposition had it been produced in a timely manner,” the filing said.
McCawley noted that Rakoff in May had admonished JPMorgan for turning over documents to the plaintiff’s legal team “at an inexplicably slow rate.”
“Despite the Court’s clear warning, JPMC still failed to expeditiously produce documents from the custodial files of key witnesses, some of whom had already been deposed, for strategic reasons,” the lawyer wrote.
“For example, the weekend prior to the close of fact discovery, and immediately after the May 26 deposition of its CEO Jamie Dimon, JPMC produced 1,500 documents, some of which came from the custodial files of witnesses whose depositions had long passed,” McCawley wrote.
“This pattern of producing documents from the custodial files of witnesses after their depositions has persisted throughout the discovery period.”
Joseph Evangelisti, a spokesman for JPMorgan, in an email to CNBC said, “Plaintiffs like the headlines, but no amount of time on the record will change the fact that Jamie never met the man, never worked with the man, and wishes in hindsight the man had never been a client of the firm.”
Former President Donald Trump greets supporters at a Team Trump volunteer leadership training event held at the Grimes Community Complex on June 01, 2023 in Grimes, Iowa.
Scott Olson | Getty Images
Former President Donald Trump has been informed he is a target of the federal criminal probe into his retention of hundreds of classified government records after leaving the White House, NBC News reported Wednesday evening.
Such notification typically occurs before prosecutors decide whether to lodge criminal charges against a target.
Trump’s attorneys were told at a meeting Monday at the Department of Justice with special counsel Jack Smith and other DOJ officials that he is a target of the classified documents investigation, according to two sources briefed on the meeting, NBC reported. It was not clear if they previously had been notified of that status for him.
Targets are people who prosecutors believe committed a crime. Targets often end up being indicted.
DOJ regulations say that a prosecutor, “in appropriate cases, is encouraged to notify such person a reasonable time before seeking an indictment in order to afford him or her an opportunity to testify before the grand jury.”
A DOJ spokesperson declined to comment.
Disclosure of Trump’s status in the investigation came as Taylor Budowich, a top aide of his, testified to a grand jury in U.S. District Court in Miami, which has been gathering evidence for the case.
Smith is probing Trump both for keeping classified records at his residence in his Mar-a-Lago club in Palm Beach, Florida, and his suspected efforts to hide those documents and keep them from government officials seeking their return. By law, presidents must surrender government records when they leave office.
A raid on Mar-a-Lago last August by the FBI uncovered hundreds of classified documents and other government records.
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Trump in a social media post on Wednesday said, “no one has told me I’m being indicted.”
He added that he should not be criminally charged in the case “because I’ve done nothing wrong.”
Trump did not directly answer a New York Times reporter, Maggie Haberman, when she asked him if he had been told he was a target, she reported.
Trump, who is seeking the 2024 Republican presidential nomination, was indicted by a New York state grand jury in March on charges of falsifying business records in connection with a 2016 hush money payment to porn star Stormy Daniels by his then-personal lawyer.
He has pleaded not guilty in that case, which is due to go to trial next year in Manhattan Supreme Court.
Smith separately is overseeing a criminal probe of Trump’s efforts to reverse his loss in the 2020 national presidential election. A state prosecutor in Georgia likewise is investigating him and his allies for such efforts in that state’s presidential election that year.
Trump on Wednesday called the prosecutors in all of those cases “fascists” who were trying to harm him politically.
JP Morgan CEO Jamie Dimon looks on during the inauguration of the new French headquarters of US’ JP Morgan bank on June 29, 2021 in Paris.
Michel Euler | AFP | Getty Images
JPMorgan Chase CEO Jamie Dimon testified last week that a top executive at the bank, Mary Erdoes, who had raised concerns about long-time customer Jeffrey Epstein, had the power to boot him as a client, according to a transcript of his deposition obtained by CNBC on Wednesday.
Dimon’s testimony Friday came after disclosures that Erdoes as early as 2006 was aware of suspicious transfers of money out of Epstein’s accounts, which lawsuits now allege were used for sex trafficking of young women.
Dimon also testified that JPMorgan’s then-general counsel Stephen Cutler had “the ultimate authority to kick him out if” issues surrounding Epstein “had gone too far.”
“He was delegating reputational decisions to somebody els” Dimon said.
During the deposition, Dimon was shown an email that Cutler sent Erdoes an email about Epstein on July 21, 2011, in which Cutler wrote: “I would like to put it and him behind us. Not a person we should do business with, period.”
Epstein was terminated as a customer in 2013, two years after that email and five years after he pleaded guilty to a Florida state charge of soliciting sex from a minor.
Dimon also testified he was not informed that Epstein was indicted in Florida for sex crimes in 2006, or of other concerns about him that others at the bank raised, the deposition reveals.
“I don’t recall knowing anything about Jeffrey Epstein until the stories broke sometime in 2019” Dimon said, referring to when Epstein was arrested on federal child sex trafficking charges.
“I was surprised that I didn’t even — had never even heard of the guy, pretty much. And how involved he was with so many people,” Dimon said.
A lawyer asked Dimon: “As CEO of private [banking] or asset and wealth management, Mary Erdoes could have decided to terminate Jeffrey Epstein as a customer, as a client, of JPMorgan; is that right?”
Dimon answered, “I generally would say that’s true, yes.”
JPMorgan is accused in two lawsuits of enabling and benefiting from sex trafficking by Epstein.
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Dimon was deposed at JPMorgan’s headquarters in New York by lawyers for the plaintiffs, and for former bank executive Jes Staley, who JPMorgan argues is responsible for any civil liability a jury might find.
“I think what happened to these women is atrocious, and I’m horrified at the amount of human trafficking that takes place,” Dimon said when asked if the accusers of Epstein deserved an apology.
“And I wouldn’t mind personally apologizing to them, not because we committed the crime, we did not, and not because we believe we’re responsible, but that any potential thing, what little role that we could have eased it or helped catch it quicker or something like that, or get it to law enforcement quicker or get law enforcement to react to it quicker, which they obviously didn’t, you know, I would apologize to them.”
Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.C., US, on Thursday, Sept. 22, 2022.
“We believe this is false. There is no evidence that any such communications ever occurred — nothing in the voluminous number of documents reviewed and nothing in the nearly dozen depositions taken, including that of our own CEO,” JPMorgan spokeswoman Patricia Wexler said in a statement to CNBC.
“The one person who claims this to be true is currently accused of horrific acts and dishonesty – and hasn’t been deposed,” Wexler said, referring to Staley.
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Wexler’s comments came hours after The Wall Street Journal published an article saying that Staley, in legal documents, said that for years he communicated with Dimon about JPMorgan’s business with Epstein.
Epstein was a client of the bank from 1998 to 2013, keeping hundreds of millions of dollars on deposit in multiple accounts.
“In the documents, Staley said that Dimon communicated with him when Epstein was arrested in 2006 and in 2008 when Epstein pleaded guilty” to a sex crime in Florida, The Journal reported.
“Staley also said that Dimon communicated with him various times about whether to maintain Epstein as a client through 2012,” according to The Journal.
Epstein served more than a year in jail for the Florida conviction of soliciting sex from a minor, a case that was widely reported at the time.
The Journal also reported that it had seen documents indicating that Dimon and Staley had a meeting scheduled with Epstein on March 2, 2010. JPMorgan told that newspaper that Dimon did not attend that meeting, and that it was not on the CEO’s calendar.
Dimon was deposed on Friday for two civil lawsuits in U.S. District Court in Manhattan against the bank accusing JPMorgan of enabling and financially benefitting from sex trafficking by Epstein.
One suit was filed by the government of the U.S. Virgin Islands, where Epstein maintained a residence on a private island. The other complaint was filed by an Epstein accuser who is seeking to make her complaint a class-action suit on behalf of other women.
The suit against JPMorgan by an Epstein accuser alleges that Staley “knew without any doubt that Epstein was trafficking and abusing girls.”
JPMorgan has claimed in a court filing that Staley is the person identified, without being named in that suit, as using “aggressive force” in sexually assaulting an Epstein accuser.
Staley denies wrongdoing and also denies having known about Epstein’s abuse of young women.
Deutsche Bank, which became Epstein’s bank in 2013 after JPMorgan severed ties with him on the heels of Staley’s exit from the bank, earlier this month agreed to settle for $75 million a lawsuit by another Epstein accuser. That deal will benefit other women who were victimized by Epstein during the time he was a Deutsche Bank customer.
JPMorgan, which denies any wrongdoing, has alleged in legal filings that Staley is responsible for any civil liability arising from Epstein’s use of funds he had on deposit at that bank to send young women to the Virgin Islands and elsewhere to be abused by him and others.
Wexler last week said after Dimon’s deposition, “Our CEO reaffirmed after his deposition that, as he has previously said, he never met with him, never emailed him, does not recall ever discussing his accounts internally, and was not involved in any decisions about his account.”
“There are over a million pages of emails and other documents that have been produced in this case and not one comes close to even suggesting that he had any role in decisions about Epstein’s accounts,” Wexler said.
“As we have said, we now know that Epstein’s behavior was monstrous, and his victims deserve justice. In hindsight, any association with him was a mistake and we regret it, but these suits are misdirected as we did not help him commit his heinous crimes.”
Epstein, 66, killed himself in a Manhattan jail in August 2019, a month after federal authorities arrested and charged him with child sex trafficking.
Dimon has expressed regret that JPMorgan did business with Epstein
“I am so sad that we had any relationship to that man whatsoever,” the CEO told Bloomberg in an interview May 11.
“You know, we had top lawyers evaluating, from the [U.S. Securities and Exchange Commission] enforcement, the [Department of Justice], you know, and obviously, had we known then what we know today, we would have done things differently,” Dimon said.
Opinions expressed by Entrepreneur contributors are their own.
In today’s digital landscape, choosing a law firm is largely influenced by online reviews. For better or worse, when prospective clients begin their search for a law firm these days, they usually start with a search engine.
And while that may be convenient for them, it opens the door for a slew of biased or untrue opinions that can put your practice on the defensive.
That’s why it’s never been more important to evaluate and manage your firm’s Google search footprint and your online reputation. Though you may be aware of your reputational standing in the real world and the legal community that sees your work, crafting a positive image for your practice takes a different type of awareness — and approach. While this may take an upfront investment, it’s well worth the time and money to ensure new clients can find your firm and entrust their case and legal needs to your team.
As a digital marketing and online reputation expert, I’m well aware of the power an online reputation can have on an attorney’s reach, revenue and long-term growth. To that end, I’d like to share a few best practices for managing law firm reviews and protecting your firm’s reputation. These crucial behaviors can help you control the online narrative while focusing on the work that truly matters.
Before making any changes to your online reputation, you need to determine where your law firm currently stands on the web. It helps to picture yourself as the average client in need of what you offer and create a list of search terms or keywords relevant to what they need and to your firm. It can help to start your search in incognito mode to ensure your previous search history doesn’t influence your results.
Begin compiling your results into a spreadsheet, pulling from the wide range of review sites as well as any third-party blogs, articles, profiles and other online elements (good, bad and neutral) you may find. This database will help paint a bigger picture of your online reputation and what platforms or areas may need more attention.
As you compile your results, take note of issues that crop up repeatedly. While some law firm reviews may be from difficult clients whose experience does not accurately represent your firm or your team, certain repeat problems can shine a light on issues that can be easily addressed and shored up as needed.
When you find negative reviews, take care to respond publicly and empathetically. Your response to each negative comment will remain online and linked to the original negative review, providing balance when future prospective clients are reading reviews and demonstrating that your firm takes client feedback seriously.
While responding to negative reviews — politely and apologetically, of course — is key to mitigating their impact on your online image, just as important is replying to positive reviews. As with negative reviews, your responses remain linked to the original posts and provide an easy but fairly powerful opportunity to bolster your online cred.
When replying to positive feedback, ensure each response is personalized rather than issuing a boilerplate reply template. Robotic replies can often hurt authenticity and sometimes undermine your efforts altogether. You may also consider reaching out to individual reviewers and asking permission to share their positive feedback. Direct quotes from satisfied clients can be shared and utilized in various ways, including on your website, in email campaigns and across other aspects of your firm’s outreach strategy.
Once you’ve addressed existing reviews affecting your firm’s brand online, you can begin gathering new reviews. Encouraging and sometimes even incentivizing client reviews (strategically, of course) can generate activity that catches Google’s attention and push your firm to the top of organic results pages. In some cases, this increased positivity can help push negative feedback off of page one. No matter what, don’t attempt to create false reviews with accounts of your own. Such black hat techniques can often create red flags that ultimately do more damage than good.
Automated email drip campaigns can provide an excellent opportunity to encourage happy clients to review your firm online. Updating your website with easy-to-find links directing clients to feedback surveys can also be an effective way to solicit positive feedback. These outlets can provide quotes you can use in both organic and paid marketing campaigns.
A major step in managing your online reputation is branching out to new digital platforms. If your firm isn’t active on social media, consider creating accounts and posting regularly. You don’t need to jump on every new app. Instead, focus on the platforms that make sense for your law firm, such as LinkedIn. There, you’re better equipped to control the narrative and present positive messaging.
It can also help to work with a public relations expert with the focus, skillset and media relationships to incorporate mentions of your law firm’s successes into high-authority online news outlets, local blogs and other high-traffic venues. Even short, relevant blog posts on your own website can help promote your practice and increase client trust in your firm. Over time, expanding to social media and other online outlets can boost your placement in search engine results while promoting your law firm where it generates the best results.
With days to spare before a potential first-ever government default, President Joe Biden and House Speaker Kevin McCarthy reached final agreement Sunday on a deal to raise the nation’s debt ceiling and worked to ensure enough Republican and Democratic votes to pass the measure in the coming week.
The Democratic president and Republican speaker spoke with each other Sunday evening as negotiators rushed to draft the bill text so lawmakers can review compromises that neither the hard-right or left flank is likely to support. Instead, the leaders are working to gather backing from the political middle as Congress hurries toward votes before a June 5 deadline to avert a damaging federal default.
“Good news,” Biden declared Sunday evening at the White House.
“The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history,” he said. “Takes the threat of a catastrophic default off the table.”
The president urged both parties in Congress to come together for swift passage. “The speaker and I made clear from the start that the only way forward was a bipartisan agreement,” he said.
The compromise announced late Saturday includes spending cuts but risks angering some lawmakers as they take a closer look at the concessions. Biden told reporters at the White House upon his return from Delaware that he was confident the plan will make it to his desk.
McCarthy, too, was confident in remarks at the Capitol: “At the end of the day, people can look together to be able to pass this.”
The days ahead will determine whether Washington is again able to narrowly avoid a default on U.S. debt, as it has done many times before, or whether the global economy enters a potential crisis.
In the United States, a default could cause financial markets to freeze up and spark an international financial crisis. Analysts say millions of jobs would vanish, borrowing and unemployment rates would jump, and a stock-market plunge could erase trillions of dollars in household wealth. It would all but shatter the $24 trillion market for Treasury debt.
Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due soon as the world watches American leadership at stake.
McCarthy and his negotiators portrayed the deal as delivering for Republicans though it fell well short of the sweeping spending cuts they sought. Top White House officials were briefing Democratic lawmakers and phoning some directly to try to shore up support.
As Sunday dragged on, negotiators labored to write the bill text and lawmakers raised questions.
McCarthy told reporters at the Capitol on Sunday that the agreement “doesn’t get everything everybody wanted,” but that was to be expected in a divided government. Privately, he told lawmakers on a conference call that Democrats “got nothing” they wanted.
A White House statement from the president, issued after Biden and McCarthy spoke by phone Saturday evening and an agreement in principle followed, said the deal “prevents what could have been a catastrophic default.”
Support from both parties will be needed to win congressional approval before a projected June 5 government default on U.S. debts. Lawmakers are not expected to return to work from the Memorial Day weekend before Tuesday, at the earliest, and McCarthy has promised lawmakers he will abide by the rule to post any bill for 72 hours before voting.
Negotiators agreed to some Republican demands for increased work requirements for recipients of food stamps that House Democrats had called a nonstarter.
With the outlines of an agreement in place, the legislative package could be drafted and shared with lawmakers in time for House votes as soon as Wednesday, and later in the coming week in the Senate.
Central to the compromise is a two-year budget deal that would essentially hold spending flat for 2024, while boosting it for defense and veterans, and capping increases at 1% for 2025. That’s alongside raising the debt limit for two years, pushing the volatile political issue past the next presidential election.
Driving hard to impose tougher work requirements on government aid recipients, Republicans achieved some of what they wanted. It ensures people ages 49 to 54 with food stamp aid would have to meet work requirements if they are able-bodied and without dependents. Biden was able to secure waivers for veterans and homeless people.
The deal puts in place changes in the landmark National Environmental Policy Act designating “a single lead agency” to develop environmental reviews, in hopes of streamlining the process.
It halts some funds to hire new Internal Revenue Service agents as Republicans demanded, and rescinds some $30 billion for coronavirus relief, keeping $5 billion for developing the next generation of COVID-19 vaccines.
The deal came together after Treasury Secretary Janet Yellen told Congress that the United States could default on its debt obligations by June 5 — four days later than previously estimated — if lawmakers did not act in time. Lifting the nation’s debt limit, now at $31 trillion, allows more borrowing to pay bills already insurred.
McCarthy commands only a slim Republican majority in the House, where hard-right conservatives may resist any deal as insufficient as they try to slash spending. By compromising with Democrats, he risks losing support from his own members, setting up a career-challenging moment for the new speaker.
“I think you’re going to get a majority of Republicans voting for this bill,” McCarthy said on “Fox News Sunday,” adding that because Biden backed it, “I think there’s going to be a lot of Democrats that will vote for it, too.”
House Democratic leader Hakeem Jeffries of New York said on CBS’ “Face the Nation” that he expected there will be Democratic support but he declined to provide a number. Asked whether he could guarantee there would not be a default, he said, “Yes.”
A 100-strong group of moderates in the New Democratic Coalition gave a crucial nod of support on Sunday, saying in a statement it was confident that Biden and his team “delivered a viable, bipartisan solution to end this crisis” and were working to ensure the agreement would receive support from both parties.
The coalition could provide enough support for McCarthy to make up for members in the right flank of his party who have expressed opposition before the bill’s wording was even released.
It also takes pressure off Biden, facing criticism from progressives for giving into what they call hostage-taking by Republicans.
Democratic Rep. Pramila Jayapal of Washington state, who leads the Congressional Progressive Caucus, told CBS that the White House and Jeffries should worry about whether caucus members will support the agreement.
U.S. Representative Chip Roy (R-TX) speaks to members of the media as he leaves a House Republican Caucus candidates forum for the running of GOP conference chair, the third ranking leadership position, on Capitol Hill in Washington, U.S., May 13, 2021.
Evelyn Hockstein | Reuters
After tough negotiations to reach a tentative deal with the White House on the U.S. borrowing limit, the next challenge for House Speaker Kevin McCarthy is pushing it through the House, where hardline Republicans are already threatening to sink it.
As Democratic and Republican negotiators iron out the final details of an agreement to suspend the federal government’s $31.4 trillion debt ceiling in coming days, McCarthy may be forced to do some behind-the-scenes wrangling.
“We’re going to try” to stop it from passing the House, Representative Chip Roy, a prominent member of the hardline House Freedom Caucus, said on Twitter. House and Senate Republicans were critical of the deal’s time frame and emerging terms.
A failure by Congress to deal with its self-imposed debt ceiling before June 5 could trigger a default that would shake financial markets and send the United States into a deep recession.
Republicans control the House 222-213, while Democrats control the Senate 51-49. These margins mean that moderates from both sides will have to support the bill, as any compromise will almost definitely lose the support of the far left and far right wings of each party.
To win the speaker’s gavel, McCarthy agreed to enable any single member to call for a vote to unseat him, which could lead to his ouster if he seeks to work with Democrats.
Roy complained on Twitter on Sunday that the agreement would leave intact an expansion of the tax-collecting Internal Revenue Service set in place when Democrats controlled both chambers of Congress.
Senator Lindsey Graham also expressed concern about the deal’s potential effect on U.S. defense and Washington’s support for Ukraine.
“Do not intend to default on debt, but will not support a deal that reduces the size of the Navy and prevents continued technological and weapons assistance to Ukraine,” Graham tweeted.
“Punting at your opponent’s one-yard line isn’t a winning strategy,” Republican Senator Mike Lee said on Twitter.
The deal suspends the debt ceiling until January 2025, after the November 2024 presidential election, in exchange for caps on spending and cuts in government programs.
Representative Dan Bishop and other hardline Republicans were sharply critical of early deal details that suggest Biden has pushed back successfully on several cost-cutting demands on Saturday, signaling that McCarthy may have an issue getting votes.
“Utter capitulation in progress. By the side holding the cards,” Bishop said.
Progressive Democrats in both chambers have said they would not support any deal that has additional work requirements. This deal does, sources say, adding work requirements to food aid for people aged 50 to 54.
The deal would boost spending on the military and veterans’ care, and cap it for many discretionary domestic programs, according to sources familiar with the talks. But Republicans and Democrats will need to battle over which ones in the months to come, as the deal doesn’t specify them.
Republicans have rejected Biden’s proposed tax increases, and neither side has shown a willingness to take on the fast-growing health and retirement programs that will drive up debt sharply in the coming years.
Several credit-rating agencies have put the United States on review for a possible downgrade, which would push up borrowing costs and undercut its standing as the backbone of the global financial system.
JPMorgan Chase CEO Jamie Dimon talks to reporters as he leaves the U.S. Capitol after an unannounced meeting with U.S. Senate Majority Leader Schumer that was reportedly about the possibility of the U.S. defaulting on its debt, outside the U.S. Capitol in Washington, May 17, 2023.
Evelyn Hockstein | Reuters
JPMorgan Chase CEO Jamie Dimon testified at a deposition in New York on Friday that he had no involvement in the accounts of longtime customer Jeffrey Epstein, the bank said.
Dimon was being deposed for lawsuits accusing JPMorgan of facilitating and profiting from Epstein’s sex trafficking of young women, which he financed with money he had on deposit there.
“At today’s deposition, our CEO repeatedly confirmed that he never met with him, never emailed him, does not recall ever discussing his accounts internally, and was not involved in any decisions about his account,” said a bank spokeswoman. ”There are millions and millions of emails and other documents that have been produced in this case and not one comes close to even suggesting that he had any role in decisions about Epstein’s accounts.”
The spokeswoman added: ”As we have said, we now know that Epstein’s behavior was monstrous, and his victims deserve justice. In hindsight, any association with him was a mistake and we regret it, but these suits are misdirected as we did not help him commit his heinous crimes.”
Dimon gave his deposition at JPMorgan’s headquarters in Manhattan. The bank earlier lost an effort to dismiss the suits by the plaintiffs – the government of the U.S. Virgin Islands and an anonymous Epstein accuser.
The suits claim that JPMorgan, the biggest bank in the United States, kept Epstein as a customer even after learning he was being investigated for sexually abusing underage girls in Florida and after he pleaded guilty in a state charge there in 2008 to paying for sex from a minor.
The bank is accused in the complaints in U.S. District Court in Manhattan of doing so in order to keep Epstein, who kept tens of millions of dollars in accounts there, despite internal concerns about his slimy reputation.
The Virgin Islands says Epstein used frequent cash withdrawals he made from those accounts to pay for young women to travel to the American territory so that he and others could abuse them at his residence on a private island he owned.
“Human trafficking was the [principal] business of the accounts Epstein maintained at JPMorgan,” the Virgin Islands’ suit says.
Dimon’s deposition is being taken in private. The questions he is asked and the answers he gives would only become public if they are used in court filings and proceedings, or if they are leaked.
JPMorgan didn’t immediately respond to CNBC’s request for comment.
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In addition to questioning Dimon under oath, the Virgin Islands has issued a flurry of subpoenas seeking documents related to Epstein and JPMorgan from a number of high-profile people the government suspects Epstein tried to recruit as fellow clients of the bank.
They include Tesla CEO Elon Musk, Google co-founders Larry Page and Sergey Brin, former Disney executive Michael Ovitz, Hyatt Hotels executive chairman Thomas Pritzker and Mort Zuckerman, the billionaire real estate investor.
Dimon’s deposition comes more than a week after Deutsche Bank agreed to pay $75 million to Epstein victims to settle a would-be class action lawsuit by one of his accusers. Deutsche Bank had taken on Epstein as a customer after JPMorgan severed ties with him in 2013, after keeping him as a client for 15 years.
JPMorgan has said Dimon had not reviewed Epstein’s accounts when he was a client there from 1998 through 2013, the year that JPMorgan severed its relationship with him.
Epstein died six years later from suicide in a New York jail a month after federal authorities charged him with trafficking girls for sex.
JPMorgan, in a related complaint, has said that any civil liability it would have from Epstein’s conduct is the responsibility of its former executive Jes Staley, who was a friend of Epstein and his main business contact at the bank.
Staley, who also denies any wrongdoing, earlier this week lost a bid to dismiss JPMorgan’s complaint against him, which among other things seeks to recoup $80 million in compensation from him.
In addition to trying to shift blame to Staley, JPMorgan this week in a court filing accused the Virgin Islands of being “complicit in the crimes of Jeffrey Epstein.”
The filing said the Virgin Islands looked the other way as Epstein trafficked young women because he was giving high-ranking officials there money, advice and favors.
The filing specifically says that Epstein paid tuition for the children of John de Jongh and his wife, Cecile, when John served as Virgin Islands governor and when Cecile worked for Epstein managing his companies in the territory.
Cecile also allegedly made efforts to secure student visas for young women connected to Epstein, and was his “primary conduit for spreading money and influence throughout the USVI government.”
The Washington Post on Friday published details of a deposition earlier taken of Mary Erdoes, who runs JPMorgan’s asset and wealth management division.
“Oh boy,” Erdoes wrote in a 2011 email to another bank executive after she found out Epstein’s status as a sex offender as a result of his Florid conviction had been affirmed, The Washington Post reported.
The newspaper said that was “at least the sixth time Erdoes … had been alerted to Epstein’s criminal or civil legal trouble for sex crimes.”
