This July 25, 2013, image provided by the Florida Department of Law Enforcement shows financier Jeffrey Epstein. (PHOTO / Florida Department of Law Enforcement via AP)

NEW YORK - A US judge said on Monday JPMorgan Chase & Co and Deutsche Bank AG must face lawsuits accusing them of enabling Jeffrey Epstein's sex trafficking.

The decision by US District Judge Jed Rakoff in Manhattan could expose the banks to additional financial and reputational damage for keeping Epstein as a client, even after the late financier registered as a sex offender.

In a six-paragraph order, Rakoff said JPMorgan must face a lawsuit by the US Virgin Islands accusing it of missing red flags about Epstein's abuse of women on Little St. James, a private island he owned there.

The judge also ruled that both banks must face proposed class actions by women who said Epstein sexually abused them. He said he would explain his reasoning in due course.

Rakoff's decision gives the plaintiffs a chance to prove that JPMorgan and Deutsche Bank knowingly benefited from involvement in Epstein's sex trafficking.

US District Judge Jed Rakoff in Manhattan also ruled that JPMorgan Chase & Co and Deutsche Bank AG must face proposed class actions by women who said Jeffrey Epstein sexually abused them

The women can also try to show that the banks were negligent and obstructed enforcement of a federal anti-trafficking law.

Brad Edwards, a lawyer for the women, said damages in a scheduled October trial covering more than 300 Epstein victims could total billions of dollars.

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The JPMorgan cases drew added attention when Jes Staley, formerly JPMorgan's private banking chief, was accused of swapping sexually suggestive messages about young women with the financier, and committing sexual assault himself.

'Landmark decision'

Both banks have said they had no legal duty to protect women from Epstein and denied accusations they knew about his abuses.

Epstein had been a client of JPMorgan from 2000 to 2013, and Deutsche Bank from 2013 to 2018.

JPMorgan spokeswoman Trish Wexler and Deutsche Bank spokesman Dylan Riddle declined to comment on Rakoff's ruling.

"It's a landmark decision," Edwards said an interview.

"To my knowledge, it's the first time a class of victims can pursue sex trafficking cases against two major financial institutions," he added. "Complicity of the banks was a necessary ingredient of Epstein's abuses, and this provides a final layer of accountability."

This file photo dated April 17, 2019 shows the JPMorgan Chase & Co world headquarters in New York City. (PHOTO / AFP)

Carol Thomas-Jacobs, the US Virgin Islands acting attorney general, in a statement said her office's case would help ensure that banks act as "a first line of defense in identifying and reporting potential human trafficking, as the law expects."

To my knowledge, it's the first time a class of victims can pursue sex trafficking cases against two major financial institutions ... Complicity of the banks was a necessary ingredient of Epstein's abuses, and this provides a final layer of accountability.

Brad Edwards, a lawyer for women who said Jeffrey Epstein sexually abused them

The territory previously recovered more than $105 million from Epstein's estate in a settlement in November, while about 138 Epstein accusers were in 2021 awarded more than $121 million from a compensation fund, also funded by the estate.

Epstein killed himself at age 66 in a Manhattan jail cell in August 2019 while awaiting trial on sex trafficking.

He had pleaded guilty to a Florida state prostitution charge in 2008, and later registered as a sex offender.

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Staley deposition

The lawsuits accused JPMorgan and Deutsche Bank of turning a blind eye to Epstein's abuses because he was an important client, and letting him make numerous wire transfers to pay victims.

In its complaint, the US Virgin Islands also suggested that JPMorgan Chief Executive Jamie Dimon was aware of Epstein's crimes and the bank's role in advancing them.

The plaintiff in one of the JPMorgan cases, known as Jane Doe 1, said she was a ballet dancer whom Epstein trafficked from 2006 to 2013.

In this file photo dated Feb 4, 2021, the logo of Deutsche Bank is seen on their headquarters in Frankfurt am Main, western Germany. (PHOTO / AFP)

In the Deutsche Bank case, the plaintiff, also known as Jane Doe 1, said Epstein sexually abused her from 2003 to 2018.

JPMorgan is separately suing Staley for concealing what he knew about Epstein, and wants him to return eight years of pay and cover losses in the other lawsuits.

The lawsuits accused JPMorgan and Deutsche Bank of turning a blind eye to Epstein's abuses because he was an important client, and letting him make numerous wire transfers to pay victims

Staley has admitted having been friendly with Epstein but expressed regret for the relationship and denied knowing about Epstein's alleged crimes.

He became Barclays Plc's chief executive after leaving JPMorgan, but resigned in November 2021 amid regulatory concerns about his relationship with Epstein.

Brendan Sullivan, a lawyer for Staley, did not immediately respond to requests for comment .

JPMorgan lawyers are expected to question Staley under oath on Thursday and Friday, and Edwards said he has asked Dimon to submit to questioning.

READ MORE: Epstein ex-girlfriend arrested, accused of luring girls into sex abuse

The cases in the US District Court, Southern District of New York are: Jane Doe 1 v Deutsche Bank AG et al, No. 22-10018; Jane Doe 1 v JPMorgan Chase & Co, No. 22-10019; Government of the US Virgin Islands v JPMorgan Chase Bank NA, No. 22-10904; and JPMorgan Chase Bank NA v Staley, in Nos. 22-10019 and 22-10904.