Story 197
This morning the Financial Times released a detailed story about Brad Karp, the longtime chairman of Paul Weiss, and his ties to Jeffrey Epstein — ties that had previously been downplayed by the law firm. The article states that Karp “appears to have been willing to push the boundaries of confidentiality rules to meet Epstein’s requests.” This was after it was known that Epstein was in the business of sex-trafficking.
That alone is a remarkable statement about one of the most powerful lawyers on Wall Street.
But the story becomes more complicated when you look at the broader network of relationships across Wall Street, large banks, and the law firms that represent them.
As has been publicly stated by Ardith Lindsey in her lawsuit against Citigroup, Paul Weiss — and Karp specifically — has been Citi’s longtime outside counsel. According to public filings, the firm has represented the bank for years, conducted internal investigations on the bank’s behalf, and has been involved in matters related to senior leadership and employment disputes.
The Financial Times also mentions John Havens, former President of Citigroup, who was arrested in a prostitution ring. Someone in a previous story mentioned that this man made her blood run cold he was so intimidating and raises questions about judgement and ethics at the company.
Separately, the Financial Times has also reported on controversial investigative tactics at Citi in corporate and security-related investigations, including reporting involving CSIS, which raised ethical questions about investigative methods used against employees — including surveillance, evidence gathering, and the boundaries of acceptable corporate investigative practices.
A separate lawsuit by a former female executive filed in January raises questions about the role of HR in internal investigations and whether compromised information was permitted to be used against her during the process. The lawsuit further alleges that she was the only party investigated for an alleged “inappropriate relationship” with a senior executive, rather than both individuals being questioned. Those allegations will ultimately be decided in court, but they raise broader governance questions about consistency, independence, and fairness in corporate investigations — issues that extend well beyond any single case.
When you step back and look at all of this together, it raises a fundamental governance question:
When the same law firm defends a company, advises its leadership, and is hired to conduct “independent” internal investigations into that same leadership or its employees, can those investigations truly be considered independent?
Another widely discussed issue on Wall Street was the internal investigation into the head of wealth at Citi that was conducted by Paul Weiss. It has been widely rumored in financial circles that Citi may have paid as much as $30 million for that investigation. If that number is even close to accurate, shareholders would reasonably want to understand what exactly that fee covered and what the scope of the investigation actually was.
From the outside, the investigation appeared to move quickly and result in limited public findings, which has led many industry observers to ask difficult questions.
Was that fee for a truly independent investigation?
Was it for legal risk management?
Or was the fee for PW to assist in a coverup?
I have no idea but this is the part of corporate America that almost nobody talks about openly. Companies often hire law firms to act as “independent investigators,” even though those same firms are also their long-time defense counsel, advisors to leadership, and recipients of tens of millions of dollars in legal fees.
Over time, the line between independent investigator and institutional protector can blur fast.
Which is why this is not just a legal issue.
It’s a governance issue.
And increasingly, shareholders will have legitimate questions about your ethics, processes, and intentions. Particularly when the lawyer you’ve trusted for decades is revealed to have exchanged this message with a man now widely recognized as the architect of one of the most abusive criminal enterprises in modern history…
Epstein: “Did she also say she was a virgin?”
Karp: “You are feisty tonight.”
https://www.ft.com/content/064e81a5-5e1b-4364-a581-9062868a3735?syn-25a6b1a6=1
https://www.ft.com/content/dddf2192-5550-4a22-976b-07d81021a5ea