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Westlake Legal Group > JPMorgan Chase&Company

WeWork Considers Rescue Plans From SoftBank and JPMorgan

Westlake Legal Group 14WEWORK-HFO-facebookJumbo WeWork Considers Rescue Plans From SoftBank and JPMorgan WeWork Companies Inc SoftBank Capital Real Estate (Commercial) Neumann, Adam JPMorgan Chase&Company Initial Public Offerings Co-Working Boards of Directors

The board of WeWork, the cash-starved purveyor of shared office space, is weighing competing financial rescue packages from SoftBank and a financial consortium led by JPMorgan Chase, according to two people with knowledge of the matter.

SoftBank, a Japanese technology giant that is already the largest outside shareholder in WeWork, is offering to take a controlling stake in the company by accelerating a $1.5 billion investment it had planned to make next year and by buying up to $3 billion in shares held by other investors, the people said. SoftBank is also offering to put together loans totaling $5 billion from a consortium of financial institutions, including SoftBank.

The JPMorgan proposal consists of several parts, including new bonds, some of which would carry high interest rates, according to people with knowledge of its plans.

The potential cash infusion comes at a critical time for WeWork, which scrapped an initial public offering and ousted its charismatic chief executive last month after Wall Street balked at its huge losses and unconventional corporate governance structure.

WeWork, once considered one of the world’s most celebrated start-ups, was valued by SoftBank at $47 billion in January but had considered selling shares in its initial public offering at a valuation as low as $15 billion. SoftBank’s latest offer to the company values it at a little less than $8 billion.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

WeWork Considers Rescue Plans From SoftBank and JPMorgan

Westlake Legal Group 14WEWORK-HFO-facebookJumbo WeWork Considers Rescue Plans From SoftBank and JPMorgan WeWork Companies Inc SoftBank Capital Real Estate (Commercial) Neumann, Adam JPMorgan Chase&Company Initial Public Offerings Co-Working Boards of Directors

The board of WeWork, the cash-starved purveyor of shared office space, is weighing competing financial rescue packages from SoftBank and a financial consortium led by JPMorgan Chase, according to two people with knowledge of the matter.

SoftBank, a Japanese technology giant that is already the largest outside shareholder in WeWork, is offering to take a controlling stake in the company by accelerating a $1.5 billion investment it had planned to make next year and by buying up to $3 billion in shares held by other investors, the people said. SoftBank is also offering to put together loans totaling $5 billion from a consortium of financial institutions, including SoftBank.

The JPMorgan proposal consists of several parts, including new bonds, some of which would carry high interest rates, according to people with knowledge of its plans.

The potential cash infusion comes at a critical time for WeWork, which scrapped an initial public offering and ousted its charismatic chief executive last month after Wall Street balked at its huge losses and unconventional corporate governance structure.

WeWork, once considered one of the world’s most celebrated start-ups, was valued by SoftBank at $47 billion in January but had considered selling shares in its initial public offering at a valuation as low as $15 billion. SoftBank’s latest offer to the company values it at a little less than $8 billion.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Big Banks Were the Loudest Optimists. They’re Getting Quieter.

Westlake Legal Group 15banks2-facebookJumbo Big Banks Were the Loudest Optimists. They’re Getting Quieter. Wells Fargo&Company United States Economy Solomon, David M JPMorgan Chase&Company Goldman Sachs Group Inc Dimon, James Corbat, Michael L Company Reports Citigroup Inc Banking and Financial Institutions

The heads of America’s largest banks have been some of the country’s most prominent optimists over the past two years, shooing away questions about the potential effects of President Trump’s trade policies, cheering his tax cuts and offering periodic reassurances that things would all work out for the American economy.

But manufacturing activity and job growth are slowing, and trade talks with China have so far produced only an interim agreement that still has to be written and signed. And bankers are starting to worry.

“Of course there’s a recession ahead — what we don’t know is if it’s going to happen soon,” Jamie Dimon, the chief executive of JPMorgan Chase, said during a call on Tuesday with journalists to discuss the bank’s third-quarter earnings.

Even as his bank announced record-high revenue, Mr. Dimon warned that the strong position of consumers in the United States had come under pressure from “increasingly complex geopolitical risks, including tensions in global trade.”

The warning was new: Just six months ago, during another discussion of the bank’s earnings, Mr. Dimon had predicted that United States economic growth “could go on for years.”

“We’ll just have to wait and see,” he said on Tuesday.

JPMorgan’s quarterly earnings were no worse for wear. The bank took in a record $29.3 billion during the third quarter and earned $2.68 per share, beating analysts’ expectations by 23 cents. Its deposits grew by 3 percent compared with the same period last year.

The report from Goldman Sachs, which also announced third-quarter results, along with Citigroup and Wells Fargo, was less rosy. The bank’s net earnings of just under $1.9 billion for the quarter were 26 percent lower than the same period last year and 22 percent lower than the second quarter of 2019. Goldman also announced that it had set aside $291 million for credit losses, a 67 percent increase from last year.

The bank’s chief executive, David Solomon, shrugged off some of the recent turmoil on Wall Street, which has included disappointing debuts by tech companies like Uber and botched initial public offerings like WeWork, saying he believed the I.P.O. market was in fact healthy. But, he said, the bank is closely watching “where we are in the economic cycle” as it manages risks across the firm.

Citigroup’s chief financial officer, Mark Mason, said on a call with journalists that the bank had begun making adjustments to its business operations to accommodate changing economic conditions.

“We’ve been very thoughtful about the pacing of our hiring,” he said.

Citigroup’s revenue was $18.6 billion, slightly lower than the previous quarter but a bit higher than its third-quarter revenue a year ago. But its corporate lending revenue decreased by 6 percent from a year earlier.

Citigroup’s business customers have been showing “pause,” Mr. Mason said, “in terms of whether they actually want to invest in building out facilities or operations, pause in terms of whether they want to consider entering into new markets.”

That was a subtle but significant admission that the slowdown was affecting Citigroup’s business.

The bank’s chief executive, Michael Corbat, had been saying for months that its global footprint allowed it to take advantage of shifting trade routes so that the president’s tariffs did not actually hurt the bank. He offered a more troubled view on Tuesday during a call with analysts.

“It has caused a slowdown in terms of trade,” Mr. Corbat said of the trade war. “If we could start to get some clarity on some of these things, where I think businesses can have some more surety on the future, our trade business would definitely benefit from that.”

Wells Fargo reported $22 billion in revenue for the quarter, slightly more than the $21.9 billion it generated in the same three months a year ago, and said it had $50 million left over from what it had set aside for loan losses in the most recent quarter.

And the bank’s chief financial officer, John Shrewsberry, pointed to a different concern that was closer to home for his business clients. “To date, while our customers are cautious, the most common concern they identify is their ability to hire enough qualified workers,” he said on a call with analysts.

Wells Fargo, the country’s fourth-largest bank, is still operating under growth restrictions imposed by its regulators, and its per-share earnings of 92 cents were lower than analysts’ expectations because of expenses from legal woes stemming from a series of scandals that began to come to light in 2016.

The bank has continued to stumble lately. Its chief executive stepped down suddenly in March not long after lawmakers grilled him over lingering problems, and The New York Times reported in August that customers whose accounts had been closed were still being charged fees for activity after the closing date. The bank’s interim chief executive, C. Allen Parker, told analysts that Wells Fargo was still looking into the matter.

The bank’s new chief executive, Charles W. Scharf, starts next week.

Wells Fargo reported a $1.6 billion charge for legal expenses related to “one of the largest lingering issues related to sales practices,” Mr. Shrewsberry said, but he declined to go into details.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Bill Gates Met With Jeffrey Epstein Many Times, Despite His Past

Westlake Legal Group 00epgates1-facebookJumbo-v3 Bill Gates Met With Jeffrey Epstein Many Times, Despite His Past Summers, Lawrence H Sex Crimes Philanthropy Microsoft Corp JPMorgan Chase&Company Gates, Bill and Melinda, Foundation Gates, Bill Epstein, Jeffrey E (1953- ) Child Abuse and Neglect Andrew, Duke of York

Jeffrey Epstein, the convicted sex offender who committed suicide in prison, managed to lure an astonishing array of rich, powerful and famous men into his orbit.

There were billionaires (Leslie Wexner and Leon Black), politicians (Bill Clinton and Bill Richardson), Nobel laureates (Murray Gell-Mann and Frank Wilczek) and even royals (Prince Andrew).

Few, though, compared in prestige and power to the world’s second-richest person, a brilliant and intensely private luminary: Bill Gates. And unlike many others, Mr. Gates started the relationship after Mr. Epstein was convicted of sex crimes.

Mr. Gates, the Microsoft co-founder, whose $100 billion-plus fortune has endowed the world’s largest charitable organization, has done his best to minimize his connections to Mr. Epstein. “I didn’t have any business relationship or friendship with him,” he told The Wall Street Journal last month.

In fact, beginning in 2011, Mr. Gates met with Mr. Epstein on numerous occasions — including at least three times at Mr. Epstein’s palatial Manhattan townhouse, and at least once staying late into the night, according to interviews with more than a dozen people familiar with the relationship, as well as documents reviewed by The New York Times.

Employees of Mr. Gates’s foundation also paid multiple visits to Mr. Epstein’s mansion. And Mr. Epstein spoke with the Bill and Melinda Gates Foundation and JPMorgan Chase about a proposed multibillion-dollar charitable fund — an arrangement that had the potential to generate enormous fees for Mr. Epstein.

“His lifestyle is very different and kind of intriguing although it would not work for me,” Mr. Gates emailed colleagues in 2011, after his first get-together with Mr. Epstein.

Bridgitt Arnold, a spokeswoman for Mr. Gates, said he “was referring only to the unique décor of the Epstein residence — and Epstein’s habit of spontaneously bringing acquaintances in to meet Mr. Gates.”

“It was in no way meant to convey a sense of interest or approval,” she said.

Over and over, Mr. Epstein managed to cultivate close relationships with some of the world’s most powerful men. He lured them with the whiff of money and the proximity to other powerful, famous or wealthy people — so much so that many looked past his reputation for sexual misconduct. And the more people he drew into his circle, the easier it was for him to attract others.

Mr. Gates and the $51 billion Gates Foundation have championed the well-being of young girls. By the time Mr. Gates and Mr. Epstein first met, Mr. Epstein had served jail time for soliciting prostitution from a minor and was required to register as a sex offender.

Ms. Arnold said that “high-profile people” had introduced Mr. Gates and Mr. Epstein and that they had met multiple times to discuss philanthropy.

“Bill Gates regrets ever meeting with Epstein and recognizes it was an error in judgment to do so,” Ms. Arnold said. “Gates recognizes that entertaining Epstein’s ideas related to philanthropy gave Epstein an undeserved platform that was at odds with Gates’s personal values and the values of his foundation.”

Two members of Mr. Gates’s inner circle — Boris Nikolic and Melanie Walker — were close to Mr. Epstein and at times functioned as intermediaries between the two men.

Ms. Walker met Mr. Epstein in 1992, six months after graduating from the University of Texas. Mr. Epstein, who was an adviser to Mr. Wexner, the owner of Victoria’s Secret, told Ms. Walker that he could land her an audition for a modeling job there, according to Ms. Walker. She later moved to New York and stayed in a Manhattan apartment building that Mr. Epstein owned. After she graduated from medical school, she said, Mr. Epstein hired her as a science adviser in 1998.

Ms. Walker later met Steven Sinofsky, a senior executive at Microsoft who became president of its Windows division, and moved to Seattle to be with him. In 2006, she joined the Gates Foundation with the title of senior program officer.

At the foundation, Ms. Walker met and befriended Mr. Nikolic, a native of what is now Croatia and a former fellow at Harvard Medical School who was the foundation’s science adviser. Mr. Nikolic and Mr. Gates frequently traveled and socialized together.

Ms. Walker, who had remained in close touch with Mr. Epstein, introduced him to Mr. Nikolic, and the men became friendly.

Mr. Epstein and Mr. Gates first met face to face on the evening of Jan. 31, 2011, at Mr. Epstein’s townhouse on the Upper East Side. They were joined by Dr. Eva Andersson-Dubin, a former Miss Sweden whom Mr. Epstein had once dated, and her 15-year-old daughter. (Dr. Andersson-Dubin’s husband, the hedge fund billionaire Glenn Dubin, was a friend and business associate of Mr. Epstein’s. The Dubins declined to comment.)

The gathering started at 8 and lasted several hours, according to Ms. Arnold, Mr. Gates’s spokeswoman. Mr. Epstein subsequently boasted about the meeting in emails to friends and associates. “Bill’s great,” he wrote in one, reviewed by The Times.

Mr. Gates, in turn, praised Mr. Epstein’s charm and intelligence. Emailing colleagues the next day, he said: “A very attractive Swedish woman and her daughter dropped by and I ended up staying there quite late.”

Mr. Gates soon saw Mr. Epstein again. At a TED conference in Long Beach, Calif., attendees spotted the two men engaged in private conversation.

Later that spring, on May 3, 2011, Mr. Gates again visited Mr. Epstein at his New York mansion, according to emails about the meeting and a photograph reviewed by The Times.

The photo, taken in Mr. Epstein’s marble-clad entrance hall, shows a beaming Mr. Epstein — in blue-and-gold slippers and a fleece decorated with an American flag — flanked by luminaries. On his right: James E. Staley, at the time a senior JPMorgan executive, and former Treasury Secretary Lawrence Summers. On his left: Mr. Nikolic and Mr. Gates, smiling and wearing gray slacks and a navy sweater.

Around that time, the Gates Foundation and JPMorgan were teaming up to create the Global Health Investment Fund. Its goal was to provide “individual and institutional investors the opportunity to finance late-stage global health technologies that have the potential to save millions of lives in low-income countries.”

As the details of the fund were being hammered out, Mr. Staley told his JPMorgan colleagues that Mr. Epstein wanted to be brought into the discussions, according to two people familiar with the talks. Mr. Epstein was an important JPMorgan customer, holding millions of dollars in accounts at the bank and referring a procession of wealthy individuals to become clients of the company.

Mr. Epstein pitched an idea for a separate charitable fund to JPMorgan officials, including Mr. Staley, and to Mr. Gates’s adviser Mr. Nikolic. He envisioned a vast fund, seeded with the Gates Foundation’s money, that would focus on health projects around the world, according to five people involved in or briefed on the talks, including current and former Gates Foundation and JPMorgan employees. In addition to the Gates money, Mr. Epstein planned to round up donations from his wealthy friends and, hopefully, from JPMorgan’s richest clients.

Mr. Epstein thought he could personally benefit. He circulated a four-page proposal that included a suggestion that he be paid 0.3 percent of whatever money he raised, according to one person who saw the proposal. If Mr. Epstein had raised $10 billion, for example, that would have amounted to $30 million in fees.

Ms. Arnold said Mr. Gates and the foundation had been unaware that Mr. Epstein had been seeking any fee. She said Mr. Epstein “did propose to Bill Gates and then foundation officials ideas that he promised would unleash hundreds of billions for global health-related work.”

In late 2011, at Mr. Gates’s instruction, the foundation sent a team to Mr. Epstein’s townhouse to have a preliminary talk about philanthropic fund-raising, according to three people who were there. Mr. Epstein told his guests that if they searched his name on the internet they might conclude he was a bad person but that what he had done — soliciting prostitution from an underage girl — was no worse than “stealing a bagel,” two of the people said.

Some of the Gates Foundation employees said they had been unaware of Mr. Epstein’s criminal record and had been shocked to learn that the foundation was working with a sex offender. They worried that it could seriously damage the foundation’s reputation.

In early 2012, another Gates Foundation team met Mr. Epstein at his mansion. He claimed that he had access to trillions of dollars of his clients’ money that he could put in the proposed charitable fund — a figure so preposterous that it left his visitors doubting Mr. Epstein’s credibility.

Mr. Gates and Mr. Epstein kept seeing each other. Ms. Arnold would not say how many times the two had met.

In March 2013, Mr. Gates flew on Mr. Epstein’s Gulfstream plane from Teterboro Airport in New Jersey to Palm Beach, Fla., according to a flight manifest. Ms. Arnold said Mr. Gates — who has his own $40 million jet — hadn’t been aware it was Mr. Epstein’s plane.

Six months later, Mr. Nikolic and Mr. Gates were in New York for a meeting related to Schrödinger, a pharmaceutical software company in which Mr. Gates had a large investment. On that trip, Mr. Epstein and Mr. Gates met for dinner and discussed the Gates Foundation and philanthropy, Ms. Arnold said.

And in October 2014, Mr. Gates donated $2 million to the Massachusetts Institute of Technology’s Media Lab. University officials described the gift in internal emails as having been “directed” by Mr. Epstein. Ms. Arnold said, “There was no intention, nor explicit ask, for the funding to be controlled in any manner by Epstein.”

Soon after, the relationship between Mr. Epstein and Mr. Gates appears to have cooled. The charitable fund that had been discussed with the Gates Foundation never materialized. Mr. Epstein complained to an acquaintance at the end of 2014 that Mr. Gates had stopped talking to him, according to a person familiar with the discussion.

The relationship, however, wasn’t entirely severed. At least two senior Gates Foundation officials maintained contacts with Mr. Epstein until late 2017, according to former foundation employees.

Ms. Arnold said the foundation was not aware of any such contact. “Over time, Gates and his team realized Epstein’s capabilities and ideas were not legitimate and all contact with Epstein was discontinued,” she said.

Days before Mr. Epstein hanged himself in a Manhattan jail cell on Aug. 10, he amended his will and named Mr. Nikolic as a fallback executor in the event that one of the two primary executors was unable to serve. (Mr. Nikolic has declined in court proceedings to serve as executor.)

Mr. Nikolic, who is now running a venture capital firm with Mr. Gates as one of his investors, said he was “shocked” to be named in Mr. Epstein’s will. He said in a statement to The Times: “I deeply regret ever meeting Mr. Epstein.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Bill Gates Met With Jeffrey Epstein Many Times, Despite His Past

Westlake Legal Group 00epgates1-facebookJumbo-v3 Bill Gates Met With Jeffrey Epstein Many Times, Despite His Past Summers, Lawrence H Sex Crimes Philanthropy Microsoft Corp JPMorgan Chase&Company Gates, Bill and Melinda, Foundation Gates, Bill Epstein, Jeffrey E (1953- ) Child Abuse and Neglect Andrew, Duke of York

Jeffrey Epstein, the convicted sex offender who committed suicide in prison, managed to lure an astonishing array of rich, powerful and famous men into his orbit.

There were billionaires (Leslie Wexner and Leon Black), politicians (Bill Clinton and Bill Richardson), Nobel laureates (Murray Gell-Mann and Frank Wilczek) and even royals (Prince Andrew).

Few, though, compared in prestige and power to the world’s second-richest person, a brilliant and intensely private luminary: Bill Gates. And unlike many others, Mr. Gates started the relationship after Mr. Epstein was convicted of sex crimes.

Mr. Gates, the Microsoft co-founder, whose $100 billion-plus fortune has endowed the world’s largest charitable organization, has done his best to minimize his connections to Mr. Epstein. “I didn’t have any business relationship or friendship with him,” he told The Wall Street Journal last month.

In fact, beginning in 2011, Mr. Gates met with Mr. Epstein on numerous occasions — including at least three times at Mr. Epstein’s palatial Manhattan townhouse, and at least once staying late into the night, according to interviews with more than a dozen people familiar with the relationship, as well as documents reviewed by The New York Times.

Employees of Mr. Gates’s foundation also paid multiple visits to Mr. Epstein’s mansion. And Mr. Epstein spoke with the Bill and Melinda Gates Foundation and JPMorgan Chase about a proposed multibillion-dollar charitable fund — an arrangement that had the potential to generate enormous fees for Mr. Epstein.

“His lifestyle is very different and kind of intriguing although it would not work for me,” Mr. Gates emailed colleagues in 2011, after his first get-together with Mr. Epstein.

Bridgitt Arnold, a spokeswoman for Mr. Gates, said he “was referring only to the unique décor of the Epstein residence — and Epstein’s habit of spontaneously bringing acquaintances in to meet Mr. Gates.”

“It was in no way meant to convey a sense of interest or approval,” she said.

Over and over, Mr. Epstein managed to cultivate close relationships with some of the world’s most powerful men. He lured them with the whiff of money and the proximity to other powerful, famous or wealthy people — so much so that many looked past his reputation for sexual misconduct. And the more people he drew into his circle, the easier it was for him to attract others.

Mr. Gates and the $51 billion Gates Foundation have championed the well-being of young girls. By the time Mr. Gates and Mr. Epstein first met, Mr. Epstein had served jail time for soliciting prostitution from a minor and was required to register as a sex offender.

Ms. Arnold said that “high-profile people” had introduced Mr. Gates and Mr. Epstein and that they had met multiple times to discuss philanthropy.

“Bill Gates regrets ever meeting with Epstein and recognizes it was an error in judgment to do so,” Ms. Arnold said. “Gates recognizes that entertaining Epstein’s ideas related to philanthropy gave Epstein an undeserved platform that was at odds with Gates’s personal values and the values of his foundation.”

Two members of Mr. Gates’s inner circle — Boris Nikolic and Melanie Walker — were close to Mr. Epstein and at times functioned as intermediaries between the two men.

Ms. Walker met Mr. Epstein in 1992, six months after graduating from the University of Texas. Mr. Epstein, who was an adviser to Mr. Wexner, the owner of Victoria’s Secret, told Ms. Walker that he could land her an audition for a modeling job there, according to Ms. Walker. She later moved to New York and stayed in a Manhattan apartment building that Mr. Epstein owned. After she graduated from medical school, she said, Mr. Epstein hired her as a science adviser in 1998.

Ms. Walker later met Steven Sinofsky, a senior executive at Microsoft who became president of its Windows division, and moved to Seattle to be with him. In 2006, she joined the Gates Foundation with the title of senior program officer.

At the foundation, Ms. Walker met and befriended Mr. Nikolic, a native of what is now Croatia and a former fellow at Harvard Medical School who was the foundation’s science adviser. Mr. Nikolic and Mr. Gates frequently traveled and socialized together.

Ms. Walker, who had remained in close touch with Mr. Epstein, introduced him to Mr. Nikolic, and the men became friendly.

Mr. Epstein and Mr. Gates first met face to face on the evening of Jan. 31, 2011, at Mr. Epstein’s townhouse on the Upper East Side. They were joined by Dr. Eva Andersson-Dubin, a former Miss Sweden whom Mr. Epstein had once dated, and her 15-year-old daughter. (Dr. Andersson-Dubin’s husband, the hedge fund billionaire Glenn Dubin, was a friend and business associate of Mr. Epstein’s. The Dubins declined to comment.)

The gathering started at 8 and lasted several hours, according to Ms. Arnold, Mr. Gates’s spokeswoman. Mr. Epstein subsequently boasted about the meeting in emails to friends and associates. “Bill’s great,” he wrote in one, reviewed by The Times.

Mr. Gates, in turn, praised Mr. Epstein’s charm and intelligence. Emailing colleagues the next day, he said: “A very attractive Swedish woman and her daughter dropped by and I ended up staying there quite late.”

Mr. Gates soon saw Mr. Epstein again. At a TED conference in Long Beach, Calif., attendees spotted the two men engaged in private conversation.

Later that spring, on May 3, 2011, Mr. Gates again visited Mr. Epstein at his New York mansion, according to emails about the meeting and a photograph reviewed by The Times.

The photo, taken in Mr. Epstein’s marble-clad entrance hall, shows a beaming Mr. Epstein — in blue-and-gold slippers and a fleece decorated with an American flag — flanked by luminaries. On his right: James E. Staley, at the time a senior JPMorgan executive, and former Treasury Secretary Lawrence Summers. On his left: Mr. Nikolic and Mr. Gates, smiling and wearing gray slacks and a navy sweater.

Around that time, the Gates Foundation and JPMorgan were teaming up to create the Global Health Investment Fund. Its goal was to provide “individual and institutional investors the opportunity to finance late-stage global health technologies that have the potential to save millions of lives in low-income countries.”

As the details of the fund were being hammered out, Mr. Staley told his JPMorgan colleagues that Mr. Epstein wanted to be brought into the discussions, according to two people familiar with the talks. Mr. Epstein was an important JPMorgan customer, holding millions of dollars in accounts at the bank and referring a procession of wealthy individuals to become clients of the company.

Mr. Epstein pitched an idea for a separate charitable fund to JPMorgan officials, including Mr. Staley, and to Mr. Gates’s adviser Mr. Nikolic. He envisioned a vast fund, seeded with the Gates Foundation’s money, that would focus on health projects around the world, according to five people involved in or briefed on the talks, including current and former Gates Foundation and JPMorgan employees. In addition to the Gates money, Mr. Epstein planned to round up donations from his wealthy friends and, hopefully, from JPMorgan’s richest clients.

Mr. Epstein thought he could personally benefit. He circulated a four-page proposal that included a suggestion that he be paid 0.3 percent of whatever money he raised, according to one person who saw the proposal. If Mr. Epstein had raised $10 billion, for example, that would have amounted to $30 million in fees.

Ms. Arnold said Mr. Gates and the foundation had been unaware that Mr. Epstein had been seeking any fee. She said Mr. Epstein “did propose to Bill Gates and then foundation officials ideas that he promised would unleash hundreds of billions for global health-related work.”

In late 2011, at Mr. Gates’s instruction, the foundation sent a team to Mr. Epstein’s townhouse to have a preliminary talk about philanthropic fund-raising, according to three people who were there. Mr. Epstein told his guests that if they searched his name on the internet they might conclude he was a bad person but that what he had done — soliciting prostitution from an underage girl — was no worse than “stealing a bagel,” two of the people said.

Some of the Gates Foundation employees said they had been unaware of Mr. Epstein’s criminal record and had been shocked to learn that the foundation was working with a sex offender. They worried that it could seriously damage the foundation’s reputation.

In early 2012, another Gates Foundation team met Mr. Epstein at his mansion. He claimed that he had access to trillions of dollars of his clients’ money that he could put in the proposed charitable fund — a figure so preposterous that it left his visitors doubting Mr. Epstein’s credibility.

Mr. Gates and Mr. Epstein kept seeing each other. Ms. Arnold would not say how many times the two had met.

In March 2013, Mr. Gates flew on Mr. Epstein’s Gulfstream plane from Teterboro Airport in New Jersey to Palm Beach, Fla., according to a flight manifest. Ms. Arnold said Mr. Gates — who has his own $40 million jet — hadn’t been aware it was Mr. Epstein’s plane.

Six months later, Mr. Nikolic and Mr. Gates were in New York for a meeting related to Schrödinger, a pharmaceutical software company in which Mr. Gates had a large investment. On that trip, Mr. Epstein and Mr. Gates met for dinner and discussed the Gates Foundation and philanthropy, Ms. Arnold said.

And in October 2014, Mr. Gates donated $2 million to the Massachusetts Institute of Technology’s Media Lab. University officials described the gift in internal emails as having been “directed” by Mr. Epstein. Ms. Arnold said, “There was no intention, nor explicit ask, for the funding to be controlled in any manner by Epstein.”

Soon after, the relationship between Mr. Epstein and Mr. Gates appears to have cooled. The charitable fund that had been discussed with the Gates Foundation never materialized. Mr. Epstein complained to an acquaintance at the end of 2014 that Mr. Gates had stopped talking to him, according to a person familiar with the discussion.

The relationship, however, wasn’t entirely severed. At least two senior Gates Foundation officials maintained contacts with Mr. Epstein until late 2017, according to former foundation employees.

Ms. Arnold said the foundation was not aware of any such contact. “Over time, Gates and his team realized Epstein’s capabilities and ideas were not legitimate and all contact with Epstein was discontinued,” she said.

Days before Mr. Epstein hanged himself in a Manhattan jail cell on Aug. 10, he amended his will and named Mr. Nikolic as a fallback executor in the event that one of the two primary executors was unable to serve. (Mr. Nikolic has declined in court proceedings to serve as executor.)

Mr. Nikolic, who is now running a venture capital firm with Mr. Gates as one of his investors, said he was “shocked” to be named in Mr. Epstein’s will. He said in a statement to The Times: “I deeply regret ever meeting Mr. Epstein.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

A Relationship With Jeffrey Epstein That Bill Gates Now ‘Regrets’

Westlake Legal Group 00epgates1-facebookJumbo A Relationship With Jeffrey Epstein That Bill Gates Now ‘Regrets’ Summers, Lawrence H Sex Crimes Philanthropy Microsoft Corp JPMorgan Chase&Company Gates, Bill and Melinda, Foundation Gates, Bill Epstein, Jeffrey E (1953- ) Child Abuse and Neglect Andrew, Duke of York

Jeffrey Epstein, the convicted sex offender who committed suicide in prison, managed to lure an astonishing array of rich, powerful and famous men into his orbit.

There were billionaires (Leslie Wexner and Leon Black), politicians (Bill Clinton and Bill Richardson), Nobel laureates (Murray Gell-Mann and Frank Wilczek) and even royals (Prince Andrew).

Few, though, compared in prestige and power to the world’s second-richest person, a brilliant and intensely private luminary: Bill Gates. And unlike many others, Mr. Gates started the relationship after Mr. Epstein was convicted of sex crimes.

Mr. Gates, the Microsoft co-founder, whose $100 billion-plus fortune has endowed the world’s largest charitable organization, has done his best to minimize his connections to Mr. Epstein. “I didn’t have any business relationship or friendship with him,” he told The Wall Street Journal last month.

In fact, beginning in 2011, Mr. Gates met with Mr. Epstein on numerous occasions — including at least three times at Mr. Epstein’s palatial Manhattan townhouse, and at least once staying late into the night, according to interviews with more than a dozen people familiar with the relationship, as well as documents reviewed by The New York Times.

Employees of Mr. Gates’s foundation also paid multiple visits to Mr. Epstein’s mansion. And Mr. Epstein spoke with the Bill and Melinda Gates Foundation and JPMorgan Chase about a proposed multibillion-dollar charitable fund — an arrangement that had the potential to generate enormous fees for Mr. Epstein.

“His lifestyle is very different and kind of intriguing although it would not work for me,” Mr. Gates emailed colleagues in 2011, after his first get-together with Mr. Epstein.

Bridgitt Arnold, a spokeswoman for Mr. Gates, said he “was referring only to the unique décor of the Epstein residence — and Epstein’s habit of spontaneously bringing acquaintances in to meet Mr. Gates.”

“It was in no way meant to convey a sense of interest or approval,” she said.

Over and over, Mr. Epstein managed to cultivate close relationships with some of the world’s most powerful men. He lured them with the whiff of money and the proximity to other powerful, famous or wealthy people — so much so that many looked past his reputation for sexual misconduct. And the more people he drew into his circle, the easier it was for him to attract others.

Mr. Gates and the $51 billion Gates Foundation have championed the well-being of young girls. By the time Mr. Gates and Mr. Epstein first met, Mr. Epstein had served jail time for soliciting prostitution from a minor and was required to register as a sex offender.

Ms. Arnold said that “high-profile people” had introduced Mr. Gates and Mr. Epstein and that they had met multiple times to discuss philanthropy.

“Bill Gates regrets ever meeting with Epstein and recognizes it was an error in judgment to do so,” Ms. Arnold said. “Gates recognizes that entertaining Epstein’s ideas related to philanthropy gave Epstein an undeserved platform that was at odds with Gates’s personal values and the values of his foundation.”

Two members of Mr. Gates’s inner circle — Boris Nikolic and Melanie Walker — were close to Mr. Epstein and at times functioned as intermediaries between the two men.

Ms. Walker met Mr. Epstein in 1992, six months after graduating from the University of Texas. Mr. Epstein, who was an adviser to Mr. Wexner, the owner of Victoria’s Secret, told Ms. Walker that he could land her an audition for a modeling job there, according to Ms. Walker. She later moved to New York and stayed in a Manhattan apartment building that Mr. Epstein owned. After she graduated from medical school, she said, Mr. Epstein hired her as a science adviser in 1998.

Ms. Walker later met Steven Sinofsky, a senior executive at Microsoft who became president of its Windows division, and moved to Seattle to be with him. In 2006, she joined the Gates Foundation with the title of senior program officer.

At the foundation, Ms. Walker met and befriended Mr. Nikolic, a native of what is now Croatia and a former fellow at Harvard Medical School who was the foundation’s science adviser. Mr. Nikolic and Mr. Gates frequently traveled and socialized together.

Ms. Walker, who had remained in close touch with Mr. Epstein, introduced him to Mr. Nikolic, and the men became friendly.

Mr. Epstein and Mr. Gates first met face to face on the evening of Jan. 31, 2011, at Mr. Epstein’s townhouse on the Upper East Side. They were joined by Dr. Eva Andersson-Dubin, a former Miss Sweden whom Mr. Epstein had once dated, and her 15-year-old daughter. (Dr. Andersson-Dubin’s husband, the hedge fund billionaire Glenn Dubin, was a friend and business associate of Mr. Epstein’s. The Dubins declined to comment.)

The gathering started at 8 and lasted several hours, according to Ms. Arnold, Mr. Gates’s spokeswoman. Mr. Epstein subsequently boasted about the meeting in emails to friends and associates. “Bill’s great,” he wrote in one, reviewed by The Times.

Mr. Gates, in turn, praised Mr. Epstein’s charm and intelligence. Emailing colleagues the next day, he said: “A very attractive Swedish woman and her daughter dropped by and I ended up staying there quite late.”

Mr. Gates soon saw Mr. Epstein again. At a TED conference in Long Beach, Calif., attendees spotted the two men engaged in private conversation.

Later that spring, on May 3, 2011, Mr. Gates again visited Mr. Epstein at his New York mansion, according to emails about the meeting and a photograph reviewed by The Times.

The photo, taken in Mr. Epstein’s marble-clad entrance hall, shows a beaming Mr. Epstein — in blue-and-gold slippers and a fleece decorated with an American flag — flanked by luminaries. On his right: James E. Staley, at the time a senior JPMorgan executive, and former Treasury Secretary Lawrence Summers. On his left: Mr. Nikolic and Mr. Gates, smiling and wearing gray slacks and a navy sweater.

Around that time, the Gates Foundation and JPMorgan were teaming up to create the Global Health Investment Fund. Its goal was to provide “individual and institutional investors the opportunity to finance late-stage global health technologies that have the potential to save millions of lives in low-income countries.”

As the details of the fund were being hammered out, Mr. Staley told his JPMorgan colleagues that Mr. Epstein wanted to be brought into the discussions, according to two people familiar with the talks. Mr. Epstein was an important JPMorgan customer, holding millions of dollars in accounts at the bank and referring a procession of wealthy individuals to become clients of the company.

Mr. Epstein pitched an idea for a separate charitable fund to JPMorgan officials, including Mr. Staley, and to Mr. Gates’s adviser Mr. Nikolic. He envisioned a vast fund, seeded with the Gates Foundation’s money, that would focus on health projects around the world, according to five people involved in or briefed on the talks, including current and former Gates Foundation and JPMorgan employees. In addition to the Gates money, Mr. Epstein planned to round up donations from his wealthy friends and, hopefully, from JPMorgan’s richest clients.

Mr. Epstein thought he could personally benefit. He circulated a four-page proposal that included a suggestion that he be paid 0.3 percent of whatever money he raised, according to one person who saw the proposal. If Mr. Epstein had raised $10 billion, for example, that would have amounted to $30 million in fees.

Ms. Arnold said Mr. Gates and the foundation had been unaware that Mr. Epstein had been seeking any fee. She said Mr. Epstein “did propose to Bill Gates and then foundation officials ideas that he promised would unleash hundreds of billions for global health-related work.”

In late 2011, at Mr. Gates’s instruction, the foundation sent a team to Mr. Epstein’s townhouse to have a preliminary talk about philanthropic fund-raising, according to three people who were there. Mr. Epstein told his guests that if they searched his name on the internet they might conclude he was a bad person but that what he had done — soliciting prostitution from an underage girl — was no worse than “stealing a bagel,” two of the people said.

Some of the Gates Foundation employees said they had been unaware of Mr. Epstein’s criminal record and had been shocked to learn that the foundation was working with a sex offender. They worried that it could seriously damage the foundation’s reputation.

In early 2012, another Gates Foundation team met Mr. Epstein at his mansion. He claimed that he had access to trillions of dollars of his clients’ money that he could put in the proposed charitable fund — a figure so preposterous that it left his visitors doubting Mr. Epstein’s credibility.

Mr. Gates and Mr. Epstein kept seeing each other. Ms. Arnold would not say how many times the two had met.

In March 2013, Mr. Gates flew on Mr. Epstein’s Gulfstream plane from Teterboro Airport in New Jersey to Palm Beach, Fla., according to a flight manifest. Ms. Arnold said Mr. Gates — who has his own $40 million jet — hadn’t been aware it was Mr. Epstein’s plane.

Six months later, Mr. Nikolic and Mr. Gates were in New York for a meeting related to Schrödinger, a pharmaceutical software company in which Mr. Gates had a large investment. On that trip, Mr. Epstein and Mr. Gates met for dinner and discussed the Gates Foundation and philanthropy, Ms. Arnold said.

And in October 2014, Mr. Gates donated $2 million to the Massachusetts Institute of Technology’s Media Lab. University officials described the gift in internal emails as having been “directed” by Mr. Epstein. Ms. Arnold said, “There was no intention, nor explicit ask, for the funding to be controlled in any manner by Epstein.”

Soon after, the relationship between Mr. Epstein and Mr. Gates appears to have cooled. The charitable fund that had been discussed with the Gates Foundation never materialized. Mr. Epstein complained to an acquaintance at the end of 2014 that Mr. Gates had stopped talking to him, according to a person familiar with the discussion.

The relationship, however, wasn’t entirely severed. At least two senior Gates Foundation officials maintained contacts with Mr. Epstein until late 2017, according to former foundation employees.

Ms. Arnold said the foundation was not aware of any such contact. “Over time, Gates and his team realized Epstein’s capabilities and ideas were not legitimate and all contact with Epstein was discontinued,” she said.

Days before Mr. Epstein hanged himself in a Manhattan jail cell on Aug. 10, he amended his will and named Mr. Nikolic as a fallback executor in the event that one of the two primary executors was unable to serve. (Mr. Nikolic has declined in court proceedings to serve as executor.)

Mr. Nikolic, who is now running a venture capital firm with Mr. Gates as one of his investors, said he was “shocked” to be named in Mr. Epstein’s will. He said in a statement to The Times: “I deeply regret ever meeting Mr. Epstein.”

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Behind WeWork Leader’s Rise and Fall: A Wall St. Bank Playing Many Angles

By

The ouster of WeWork’s co-founder and its botched initial public offering are a remarkable collapse of what was considered, up until weeks ago, one of the most valuable start-ups in the world.

This is not simply the failure of a young and capricious founder. Adam Neumann, who helped start the company in his early 30s, was a magnetic leader with a brash style that constantly invited controversy. The problem is that the adults in the room didn’t act like adults.

One of those adults was perhaps Mr. Neumann’s most critical enabler: JPMorgan Chase.

While SoftBank, the Japanese conglomerate, is the biggest and most notable investor in WeWork’s parent company, JPMorgan has been one of its most ardent backer for years, working multiples sides. It lent Mr. Neumann money personally (with his inflated shares as collateral), provided equity and debt for the company, served as a corporate adviser for the I.P.O. and secured nearly $6 billion in financing as part of the now scotched offering.

If there was one institution best placed to fully understand the various conflicts of Mr. Neumann, it was JPMorgan.

The bank, in concert with UBS and Credit Suisse, provided Mr. Neumann with a $500 million line of personal credit, some of which was used to buy stakes in four buildings where he then had WeWork lease space. The self-dealing was so offensive to investors that he was forced to unwind the arrangement ahead of the public offering. JPMorgan also provided Mr. Neumann with an additional $97.5 million in loans, according to company filings, including for a mortgage used to buy a 60-acre property in Westchester County.

JPMorgan was working for the company, too, leading an extension of a $1.2 billion line of credit for WeWork all the way back in 2015; it later led another round of some $700 million in additional debt for the company. JPMorgan also participated in at least one funding round for WeWork in which its asset management clients invested in the company.

All of which is to say, some of the money intended for the company seemed to go from WeWork’s pocket into Mr. Neumann’s pocket.

And JPMorgan, either knew it or should have known it.

“That is an all-time Gordian knot of conflicts of interest, and there is no way to get around it,” said  Nell Minow, a longtime corporate governance expert who is now vice chair at ValueEdge Advisors.

JPMorgan “had to know” about all of Mr. Neumann’s self-dealing and other behavior, she added. “That’s literally their job. And if they didn’t, they were beyond negligent.”

Given the required diligence to provide loans, JPMorgan had better access to both WeWork’s finances and the personal finances of Mr. Neumann than even the company’s biggest investors, like SoftBank.

JPMorgan’s aggressive effort to lend money to Mr. Neumann and WeWork was all part of the bank’s desire to win the lead role for its high-profile initial public offering and earn part of the estimated $100 million in fees. JPMorgan eventually did win that role, but a failed I.P.O. isn’t much of a prize.

To be fair, JPMorgan wasn’t alone on Wall Street in courting WeWork. Goldman Sachs, Morgan Stanley and just about every major firm made pilgrimages to Mr. Neumann’s office with proposals for the services they could provide. Had JPMorgan not provided the personal or corporate loans, another bank most likely would have happily done so.

But at any point, JPMorgan could have said it wouldn’t work with Mr. Neumann if the bank felt that actions of the company’s leadership raised red flags.

A spokesman for the bank declined to comment.

To its credit, the bank pressed Mr. Neumann and the company to disclose his personal conflicts in its offering filings. Those disclosures led to a backlash by investors, upending the stock offering. Depending on your perspective, arguably the “process” worked, providing transparency about the mismanagement at the company to potential public investors who were so turned off that the offering has been shelved for now.

In truth, it is easy to look back and point fingers. There was a collective mania around WeWork. Virtually every bank that pitched WeWork on its offering got it wrong. Just a year ago, JPMorgan was telling Mr. Neumann that it could find buyers at a company value of more than $60 billion; Goldman Sachs was floating a number over $90 billion, and Morgan Stanley speculated that even more than $100 billion was possible, according to people briefed on the proposals, who spoke on the condition of anonymity to discuss private negotiations. All of those valuations, inevitably, only emboldened Mr. Neumann.

And therein may lie the lesson: JPMorgan might have thought it would have lost big fees if it had abandoned WeWork, but it lost something more valuable — a small part of its reputation — by sticking with it.

Read more:
WeWork C.E.O. Adam Neumann Steps Down Under Pressure
The shake-up is the most significant step that the start-up, valued at nearly $50 billion at one point, has taken to win over Wall Street after a botched I.P.O.

Sept. 24, 2019

Westlake Legal Group 25wework-silo-threeByTwoSmallAt2X-v3 Behind WeWork Leader’s Rise and Fall: A Wall St. Bank Playing Many Angles WeWork Companies Inc Neumann, Adam JPMorgan Chase&Company Initial Public Offerings

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Banks Want Efficiency. Critics Warn of Backsliding.

WASHINGTON — A decade after big banks needed government support to dig out of the financial crisis, the Federal Reserve is slowly, but steadily, making a series of regulatory changes that could chip away at new requirements put in place to prevent a repeat of the 2008 meltdown.

Some of the changes, seemingly incremental and technical on their own, could add up to a weakening of capital requirements installed in the wake of the crisis to prevent the largest banks from suffering the kind of destabilizing losses that imperiled the United States economy.

Fed officials and others who support the changes, including big banks, say the Fed is engaging in what they call “tailoring” — a regulatory correction that will bring greater efficiency to standards written in the heat of a meltdown. They say the tweaks will not weaken the ability of banks to withstand financial losses but will reduce burdensome regulations that could have unintended consequences, like encouraging risk-taking.

But some current and former Fed officials worry that the central bank and its fellow regulators are giving large banks, which are making big profits, an unnecessary gift that could leave the economy exposed in the next downturn. They say the overseers should be forcing banks to maintain or even build up their defenses given the strong economy, which is in its longest expansion on record, rather than eroding those buffers.

“No individual thing jumps out, but if you look at the sum total, the direction of travel is not entirely encouraging,” Jeremy Stein, a Harvard professor and former Fed governor, said on a recent panel. “You need to be incredibly vigilant, and really understand this stuff very well. It’s very opaque, in many ways.”

The changes, some put into place and others still under consideration, range from making it easier for big banks to pass the Fed’s annual “stress test” of their financial health to allowing some to borrow more. One idea being floated could quietly reduce capital levels at the biggest American banks over the course of the business cycle.

The tinkering is being driven by Randal K. Quarles, the Fed’s vice chair for supervision, whom President Trump nominated in 2017, and the effort has earned the consideration of Jerome H. Powell, the Fed chair. At a news conference last month, Mr. Powell said the Fed was weighing a proposal that might have the effect of reducing average capital levels at big banks over time.

Bolstering capital at large banks was a centerpiece of postcrisis efforts, as regulators looked for ways to ensure that banks would have stable sources of financing in the event of another downturn. In a crisis, depositors and creditors may demand that a bank return their money, destabilizing the financial system. Indeed, that helped to fell Lehman Brothers, the investment bank that collapsed in 2008.

But capital — money raised from shareholders or retained as profits — does not have to be repaid. The 18 biggest banks, which include American firms like JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America, added more than $650 billion in common equity capital from the beginning of 2009 through the end of last year.

Bankers acknowledged that capital needed to be higher after the 2008 crisis, but increasingly say enough is enough. Big banks have complained of measures that might increase capital from current levels or that could make year-to-year requirements fluctuate more, and have criticized United States rules for being more demanding than international standards.

Bank lobbying groups like the Bank Policy Institute have pushed back on calls to lift capital requirements, saying that stricter regulations “would harm economic growth with little benefit to the safety and soundness of the financial system.” And the country’s large banks have been working for more than a year to persuade the Fed to avoid putting more stringent capital rules in place.

Representatives from each of the biggest banks have met multiple times with Fed officials to talk about the stress capital buffer, a measure that would condense and streamline capital requirements, according to two people familiar with the matter. Each bank also used a public comment period in 2018 to send letters detailing specific suggestions for changes the Fed could make when it enacts the new standard.

“We’re comfortable with the capital regime that we’re operating under,” John Shrewsberry, Wells Fargo’s chief financial officer, said on a call with reporters last month.

Executives have a reason for opposing tougher capital requirements. They force banks to limit stock buybacks and dividend payments, curbing moves that help lift share prices. A big chunk of senior bank executives’ compensation is made up of stock. Yet existing capital requirements have not stopped banks from returning large amounts of excess capital to their shareholders. Last year, the eight largest American banks spent $104 billion on stock buybacks and dividend payments, up nearly a fourth from $84 billion in 2017.

Some Fed officials say capital requirements are already on the low side and should be beefed up, and careful watchers of financial regulation warn that current regulatory tweaks could bite into capital over time.

Lael Brainard, a Fed governor who was appointed by President Barack Obama, has now dissented on six separate regulatory matters, and has said that the Fed must be “especially vigilant to safeguard the resilience of our financial system in good times when vulnerabilities may be building.”

The president of the Federal Reserve Bank of Dallas, Robert Kaplan, and Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, have warned against making changes that reduce capital requirements.

ImageWestlake Legal Group merlin_154870338_c593db35-50f9-4dea-9d48-569d369d703c-articleLarge Banks Want Efficiency. Critics Warn of Backsliding. Yellen, Janet L United States Economy Subprime Mortgage Crisis Stein, Jeremy C Regulation and Deregulation of Industry Quarles, Randal K Powell, Jerome H Liang, Nellie Lehman Brothers Holdings Inc Kashkari, Neel T Kaplan, Robert S JPMorgan Chase&Company Goldman Sachs Group Inc Federal Reserve System Citigroup Inc Brainard, Lael Banking and Financial Institutions Bank of America Merrill Lynch Bank of America Corporation

Randal Quarles, the Fed’s vice chairman for supervision, has been driving many of the proposals aimed at changing post-crisis bank rules. Mr. Quarles, who was appointed by President Trump, has said many of the rules need to be tweaked to make them more efficient and effective.CreditJonathan Ernst/Reuters

Fed research shows that bank capital should be in a range of 13 percent to more than 26 percent of a bank’s assets, adjusted for risk, to best balance threats that emerge during downturns against costs to economic activity during times of expansion. Capital ratios at the eight biggest American banks stood at about 12.3 percent early this year.

“The biggest banks need substantially more capital,” Mr. Kashkari said in an interview, calling changes that could weaken requirements “concerning.”

Mr. Powell and Mr. Quarles often say that capital levels are “about right” at the moment. But an idea being floated by Mr. Quarles has the potential to lower capital levels at the biggest banks over the course of the business cycle.

Mr. Quarles has said the Fed should revisit what’s known as the “countercyclical capital buffer” — a fancy name for an extra level of capital that the Fed can require banks to add during robust economic times. The buffer, created by an international statute, allows regulators to respond to economic conditions — turning it down to unleash money and encourage lending when the economy needs it and raising it when the economy is running hot.

The Fed has never turned on the capital buffer, though Ms. Brainard and Janet L. Yellen, the former Fed chair, have been advocating that the Fed should consider enacting it now, when the economy is strong.

The other Fed governors have resisted enacting it, arguing that capital levels are high enough and that financial risks are not elevated. Mr. Quarles has gone a step further, saying that the extra layer is essentially always “on” because the Fed and its fellow regulators require American banks to maintain much higher capital levels than their global peers.

Mr. Quarles has suggested that the countercyclical buffer should be counted toward existing capital requirements. The move could reduce capital requirements over time, relative to the status quo, because banks would face lower standards during downturns, analysts say.

Mr. Powell indicated on July 31 that the Fed was contemplating such a change.

“The idea of putting it in place so that you can cut it — that’s something other jurisdictions have done, and it’s worth considering,” Mr. Powell said. “This isn’t something we’ve decided to do. It’s just under consideration.”

Critics say that treating the countercyclical buffer as part of current requirements, instead of as a cherry on top, even risks permanently lowering capital requirements.

“I’ll believe it when I see it, that a Federal Reserve constituted like we have now will ever voluntarily turn on the capital buffer,” said Jeremy Kress, a former Fed regulator who now works at the University of Michigan. “It’s a backdoor reduction of capital.”

A proposal already underway will lower capital slightly, while making a hard cap on how much the biggest banks can borrow more flexible. Known as the “enhanced supplemental leverage ratio,” the measure was put in place to ensure that the eight largest United States banks did not overextend themselves with borrowed money, as some did in the lead-up to the financial crisis. The changes would give banks more room to borrow and bring United States rules in line with global standards.

Mr. Quarles has called it a “modest recalibration” that will ensure that banks’ capital requirements better reflect the risks to which they are exposed. Bank executives support the change, which could free $400 million of bank holding company capital — 0.04 percent of the total — for dividend payouts and buybacks, according to staff estimates.

Not all of the tweaks act on capital directly. For example, the Fed has also begun disclosing more information about its stress tests, which critics equate to giving banks the answers ahead of the test. Mr. Quarles takes objection to that characterization, saying the point of stress testing is to encourage strong capital standards, not to punish banks.

“Like a teacher, we don’t want banks to fail. We want them to learn,” he said in a July speech.

The Fed has also cut a qualitative component from most banks’ tests, one that checks in on their processes, rather than assessing numbers alone. Ms. Brainard voted against the move.

The Fed is also expected to soon approve changes to the Volcker Rule, which was ushered in after the crisis to limit banks’ investment activities. The revised rule, which must be approved by the Fed and four other financial regulators, could give banks more flexibility to invest in private equity and hedge funds and will probably be “helpful to the big banks, especially in terms of making compliance easier,” Ian Katz, an analyst with Capital Alpha, wrote in a note previewing the move. The Federal Deposit Insurance Corp. will discuss the proposal on Tuesday.

The risk with all the fiddling, experts say, is less that any individual change will burn down the house — in fact, banks and some lawmakers have urged the Fed to move faster. It is more that this gradual drip of deregulation points in one direction for the largest banks, and could undermine standards just as the expansion hits record length and the economy faces challenges.

Mr. Stein, the former Fed governor, said in an interview that his concern was partly about the message sent to bank supervisors in the field.

“What is the tone that you’re setting?” he said.

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Jeffrey Epstein’s Opaque Finances Could Become Focal Point for Investigators

COLUMBUS, Ohio — The money, tens of millions of dollars of it, would flow among Jeffrey Epstein’s dozens of bank accounts, shell companies and, at times, charities linked to high-powered friends.

Where was the money going? What was it for? Who was actually sending and receiving it?

A convicted pedophile and accused sex trafficker who surrounded himself with an elite network of business and political leaders, Mr. Epstein enjoyed the trappings of great wealth: private jets, mansions, his own island. But much remains unknown about the sources of his wealth.

Legions of lawyers, bankers and accountants have been trying in recent weeks to solve that mystery, and their quest is unlikely to end after Mr. Epstein was found dead on Saturday morning. The answers could illuminate how Mr. Epstein allegedly operated a long-running sex-trafficking operation, whether he had help from others and who — including Mr. Epstein’s victims — will receive any of his remaining assets. It is not known if Mr. Epstein had a will.

Interviews with people briefed on various investigations into Mr. Epstein’s wealth, and legal and financial documents in multiple countries, show that tens of millions of dollars coursed through his offshore companies and foundations in sometimes unusual ways.

In the early 2000s, for example, $88 million appeared in Mr. Epstein’s Virgin Islands-registered company that normally was home to only small amounts of money. At another point, an entity once linked to Mr. Epstein sent tens of millions of dollars to the charity of a billionaire retail tycoon, Leslie H. Wexner — years after Mr. Wexner has said he severed ties with Mr. Epstein.

Executives at the companies with the deepest connections to Mr. Epstein expect that federal prosecutors will intensify their focus on his financial affairs. Geoffrey S. Berman, the United States attorney for Manhattan, said on Saturday that his office’s investigation into Mr. Epstein and those around him would continue, despite his death.

Officials at JPMorgan Chase and Deutsche Bank, the two banks that for years served Mr. Epstein, have spent recent weeks poring through their records, belatedly trying to ascertain how they ended up doing business with a sex criminal and what Mr. Epstein was using his bank accounts for, according to people familiar with the internal reviews.

Years before Mr. Epstein’s accounts were shut down, compliance officers and other employees at both banks had urged executives to stop serving Mr. Epstein, citing the legal and reputational risks of working with him, according to former Deutsche Bank and JPMorgan employees. At both banks, managers and executives rejected that advice and kept doing business with the lucrative client.

ImageWestlake Legal Group merlin_159011859_4b159e7f-8aa6-4897-bae0-2d542f8cc170-articleLarge Jeffrey Epstein’s Opaque Finances Could Become Focal Point for Investigators Wexner, Leslie H Sex Crimes L Brands Inc. JPMorgan Chase&Company Epstein, Jeffrey E (1953- ) Deutsche Bank AG

Leslie H. Wexner, the chief executive of the apparel conglomerate L Brands, with his wife, Abigail, in 2014. The knottiest financial enigma involves Mr. Epstein’s relationship with Mr. Wexner, who for years entrusted Mr. Epstein with his financial life.CreditJay Laprete/Associated Press

Deutsche Bank, where Mr. Epstein was a client from 2013 until June 2019, has been handing over transaction-by-transaction data to federal prosecutors and other authorities, according to two people familiar with the matter. One of those people, who was briefed on the bank’s internal review, said it appeared that Mr. Epstein was using his accounts for sex trafficking and possibly other illegal activity. The banker who initiated the relationship with Mr. Epstein left Deutsche Bank last year, around the time that the company decided to begin shutting down Mr. Epstein’s accounts, according to one of the people.

JPMorgan has not been contacted by government authorities, a person familiar with the bank said, but executives expect they will be asked to provide records about their relationship with Mr. Epstein, which lasted from the late 1990s until 2013.

But the knottiest financial enigma involves Mr. Epstein’s relationship with Mr. Wexner, the chief executive of the apparel conglomerate L Brands, who for years entrusted Mr. Epstein with his financial life.

L Brands, a publicly traded company that owns Victoria’s Secret and Bath & Body Works, has hired a prominent law firm, Davis Polk & Wardwell, to investigate what role, if any, Mr. Epstein played at the company, according to people briefed on the matter.

Mr. Wexner has said that he had severed ties with Mr. Epstein in late 2007, more than a year after Mr. Epstein was first charged with sexual misconduct with minors. In 2008, Mr. Epstein pleaded guilty in Florida to soliciting prostitution from a minor.

In a letter last week to his family foundation, Mr. Wexner, 81, accused Mr. Epstein of having misappropriated “vast sums.”

People briefed on the matter said Mr. Epstein created a complex web of investment vehicles for Mr. Wexner, then collected high fees or withdrew funds for his personal use. Tax records show that many millions of dollars moved from one of Mr. Wexner’s charities to a charity that Mr. Epstein controlled.

But Mr. Wexner has not made public evidence showing that Mr. Epstein misappropriated the money, disclosed how much money Mr. Epstein took or said where Mr. Epstein misappropriated the money from. For about 16 years, Mr. Wexner had formally delegated to Mr. Epstein virtually blanket control of his finances — the authority to sign checks, borrow money, buy and sell real estate and hire workers on his behalf.

Mr. Wexner said he discovered the missing money when he and Mr. Epstein parted ways in 2007. The billionaire never contacted the state and federal authorities who were investigating Mr. Epstein at the time for sex crimes, according to people briefed on the matter. Instead, Mr. Wexner’s lawyers worked out a private arrangement in which Mr. Epstein’s foundation and business would repay some of the misappropriated money, the people said. They said Mr. Epstein returned about $100 million to Mr. Wexner.

But in 2011 — four years after Mr. Wexner has said he had severed all ties with Mr. Epstein — Mr. Wexner’s charitable foundation received a $56 million contribution from a trust linked to Mr. Epstein, according to charity records and other financial documents reviewed by The New York Times.

Deutsche Bank in Manhattan. Officials at the bank and at JP Morgan Chase have spent recent weeks poring through their records, belatedly trying to ascertain how they ended up doing business with Mr. Epstein.CreditJeenah Moon for The New York Times

The trust, named “Community Interest,” had been listed as being under Mr. Epstein’s control in a Swiss bank account, according to financial records included in a leak to the French newspaper Le Monde. The documents were shared with The Times through a collaboration organized by the International Consortium of Investigative Journalists. It is not clear from public records who controlled Community Interest in 2011.

Thomas Davies, a spokesman for Mr. Wexner, said in a statement, “A Charitable Remainder Trust established prior to Mr. Epstein’s termination in 2007 matured according to its terms and assets flowed into the charitable fund at the time of its maturity.”

Through his spokesman, Mr. Wexner declined repeated interview requests and to answer questions as to why he did not contact the authorities about the claims that Mr. Epstein had misappropriated his money.

The flow of money between the foundations, the apparent mixing of private and charitable funds and the use of a foundation to settle a claim of misappropriation appears problematic, said Ray Madoff, a professor at the Boston College Law School and an expert in rules governing charities.

“It definitely raises questions,” Ms. Madoff said. “None of this seems to be engaged in for charitable purposes. It seems it was being engaged in for unwinding their affairs. Using charities for that is not really appropriate.”

Tens of millions of dollars were also flowing in and out of a tiny financial advisory company that Mr. Epstein incorporated on St. Thomas, in the United States Virgin Islands.

Sometime between June 2000 and June 2001 — when Mr. Epstein was serving as a financial adviser to Mr. Wexner — $88 million suddenly appeared in the company’s coffers, according to documents filed in St. Thomas. It was an extraordinary sum for such an offshore company, where a lone shareholder of a private holding company would generally only invest a token amount to keep the company legally solvent.

Then, over the next several years, the money was periodically withdrawn from the company, the filings show. There are no public clues as to where the $88 million came from or where it went. After 2005, the company and its successor had no more than $700,000 in their bank accounts at any one time.

Two of Mr. Epstein’s longtime attorneys, Darren Indyke and Jeffrey Schantz, were involved with some of his trusts and other entities in New York and in the Virgin Islands, according to incorporation documents. Neither lawyer responded to requests for comment.

In a sign that the attorneys are bracing for government scrutiny of Mr. Epstein’s companies, Mr. Indyke and Mr. Schantz both recently hired criminal defense lawyers.

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‘Take It Like a Gift’: Chase Erases Canadian Credit Card Debts

Westlake Legal Group 09chase-facebookJumbo ‘Take It Like a Gift’: Chase Erases Canadian Credit Card Debts Personal Finances JPMorgan Chase&Company credit cards Canada

Every consumer with credit card debt fantasizes about having it magically wiped away. For customers with Canadian credit cards from JPMorgan Chase, the dream came true: The bank said this week that it had erased their remaining debt as it closes down its credit card business in Canada.

Recipients of the windfall reacted with a mix of elation and shock. “I asked the rep on the phone about five times if she was sure all was truly forgiven,” one posted on a personal finance board after seeing the $883.67 balance on her card drop to zero. “Her reply? Take it like a gift.”

A Chase spokeswoman, Maria Martinez, confirmed the freebie. “Chase made the decision to exit the Canadian credit card market,” she said. “A further business decision was made earlier this year to forgive all outstanding balances in order to complete the exit.”

Chase stopped accepting new applications two years ago for its two Canadian credit cards, which were co-branded with Amazon and Marriott. In March 2018, the bank closed its existing accounts and blocked customers from incurring new charges, but it continued collecting payments on the remaining balances.

Paul Adamson, an Ontario resident, learned of his lucky break last week when he tried to pay the bill on his Amazon card. His bank told him that it could not process the payment. Mr. Adamson, 43, called Chase to investigate and learned that his remaining $1,600 debt had been forgiven.

Chase’s decision is extremely unusual. Sara Rathner, NerdWallet’s credit card expert, said she had never heard of a bank’s simply writing off balances as it shut down a credit card product. More typically, the bank would keep collecting payments or sell the remaining balance to a debt buyer. When HSBC left the United States credit card business, for example, it sold its portfolio to Capital One.

Chase “felt it was a better decision for all parties, particularly our customers, to forgive the debt,” Ms. Martinez said. She declined to comment on how much debt had been written off or on how many customers were affected.

A man whose $6,000 bill was erased told the CBC, Canada’s national broadcaster, that he was “sort of over the moon all last night, with a smile on my face.”

The move gives people “a great opportunity to start fresh,” Ms. Rathner said. “It’s like it’s a sign from the universe — you’re out of debt, and now hopefully you can make choices that avoid getting you into debt in the future.”

Mr. Adamson plans to put the $150 a month he no longer has to pay to Chase in his nest egg for a townhouse. He and his wife have been aggressively working for the last year to pay off their consumer debts, he said, and hope to go home shopping next spring.

“Everyone I’ve talked to is really keen on this good-news credit card story,” Mr. Adamson said. “Those aren’t words that usually go together.”

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