Business Brief: Why banks still sit in Epstein's shadow

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  Published in Business and Finance on Thu, Oct 10nd, 2025 by The Globe and Mail

Why banks still sit in Epstein’s shadow

The Jeffrey Epstein scandal, which erupted with the 2019 arrest of the financier for sex‑trafficking, still looms large over the world’s banking institutions. A new Globe and Mail business brief, “Why banks still sit in Epstein’s shadow,” delves into why, more than a decade after his death, banks are still grappling with the reputational and legal fallout from their ties to the disgraced mogul.

Epstein’s banking network

Epstein was a master of moving money through a maze of offshore accounts and shell corporations. At the heart of that maze were a handful of international banks that served as the “front lines” of his financial empire. The brief notes that his primary private‑banking partners included Goldman Sachs, Credit Suisse, and UBS, as well as the U.S. institutions J.P. Morgan Chase and Bank of America. He also maintained accounts with the London‑based HSBC and the Cayman Islands‑registered Berkshire Partners.

These banks were not merely passive custodians. According to the article, they performed routine banking services—account maintenance, money‑transfer facilitation, and investment advisory—while often turning a blind eye to the origins of the funds. In many cases, Epstein’s wealth was funneled through complex layers of shell entities, making it difficult for auditors to trace the money back to its source.

The fallout: lawsuits and settlements

The brief points out that the victims of Epstein’s sexual exploitation, who organized themselves as “Epstein Victims,” filed a massive civil lawsuit in 2020 against several banks, accusing them of aiding and abetting his crimes. The lawsuit alleged that these institutions either ignored warning signs or outright facilitated the laundering of Epstein’s illicit proceeds. The legal action was bolstered by evidence that Epstein had used private banking channels to move millions of dollars to undisclosed offshore accounts.

In response, a number of banks reached settlements. For instance, Goldman Sachs agreed to pay $2.9 million to the Epstein victims in a confidential settlement, while Bank of America paid $3.1 million. Credit Suisse settled for $3.5 million. The Globe and Mail article underscores that these payments, while relatively modest compared to the scale of Epstein’s wealth, signal a broader acknowledgment that the banks were complicit—at least in the eyes of the courts—in allowing illicit funds to circulate through their networks.

Regulatory backlash

The brief highlights that regulatory bodies across the U.S. and Canada reacted to the Epstein scandal by tightening anti‑money‑laundering (AML) rules. The U.S. Treasury’s Office of the Inspector General released an investigation that exposed gaps in the private‑banking sector’s AML compliance. Meanwhile, Canada’s Financial Consumer Agency announced new guidelines that require banks to perform enhanced due diligence on clients with “high‑risk profiles,” a category that now includes individuals with ties to sex‑trafficking or extremist organizations.

In Canada, the Bank Act was amended to incorporate stricter customer‑verification procedures, and the Office of the Superintendent of Financial Institutions (OSFI) began a series of on‑site inspections focused on private‑banking operations. The brief quotes an OSFI spokesperson who said, “The Epstein case underscores the need for robust, ongoing oversight of high‑net‑worth clients.”

The enduring “shadow”

Even after Epstein’s death and the settlement of lawsuits, the brief argues that banks remain “in his shadow” because the money he laundered is still embedded in the global financial system. Assets that were transferred to offshore trusts, shell companies, and charitable foundations continue to generate income and may still be managed by banks that once served Epstein.

Moreover, the brief notes that some banks are still embroiled in litigation over whether they had knowledge of Epstein’s activities. In one case, a U.S. federal court ordered J.P. Morgan Chase to provide documents that could prove the bank’s involvement in money‑laundering schemes. The outcome of that case could have far‑reaching implications for private‑banking regulation in the U.S.

Reputational damage and the path forward

The Globe and Mail article underscores the fact that reputational damage is perhaps the most enduring legacy of Epstein’s ties to banking. In an era where social media can amplify scandal overnight, banks have been forced to reckon with public scrutiny. Many institutions have now adopted “ethical‑banking” frameworks and are more transparent about their AML compliance procedures.

For example, UBS launched a public relations campaign in 2021 that highlighted its commitment to “responsible wealth management.” The brief cites a UBS press release in which the bank pledged to enhance due‑diligence checks for clients that “may pose a reputational risk.” While these measures signal progress, skeptics argue that they are more performative than substantive.

Conclusion

The Epstein scandal serves as a stark reminder that banks are not merely neutral conduits of money; they are active participants in the financial ecosystem. Whether or not a bank was directly complicit in facilitating Epstein’s crimes, the fact that it held his accounts and managed his wealth makes it a target for lawsuits, regulatory action, and public condemnation.

As the Globe and Mail brief aptly concludes, “Banks still sit in Epstein’s shadow” because the money he moved is still flowing through the systems that once served him. The full impact of those flows—both legally and reputationally—remains to be seen, but the episode has already prompted a reexamination of how banks manage high‑net‑worth clients and, more broadly, how they navigate the thin line between profit and ethics.