How Jeffrey Epstein Made Millions From His Connections

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0:28So when this big batch of Epstein files came out in late January, do you remember where you were? I was really sick in bed, trying not to work, actually. That's our colleague Emily Glazer, who writes about the rich and powerful, including about people with ties to Jeffrey Epstein. And I got a call from Khadijah Safdar, who is our lead reporter on all things Epstein. and she's like, oh my God, you won't believe it. And I was like, not really that with it. I'm like logging into these files, kind of like a little like out of it. And then I was just like, oh my gosh. And so I became obsessed. Every night I'd log in after my son went to sleep and I would spend like hours searching different things to see what I could find.

1:12So in your pastime, you're just spending hours and hours reading the Epstein files. Okay, in fairness, my husband was on a work trip. And so I literally, like, each night, I would stay up for a couple of hours just reading through it and finding new things. And I started to create a timeline. And my editor, this poor guy, I'm just constantly messaging him with, like, this and that and that. One of the things Emily found was that Epstein was frequently receiving confidential company information from powerful people on his network and making millions of dollars in the process. What we are writing about here is how Epstein really collected all this information and tips about stocks and startups, both public companies and private companies, and would oftentimes then invest and sometimes make money and sometimes not make money.

2:07We have this unprecedented access to all of these emails and all of these little snippets of conversations that we never had insight into before. How would you describe how these people were talking to each other? Good question. Very casually and often not abiding by typical rules or guidelines that exist when you're handling confidential information. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Thursday, March 26th.

2:54Coming up on the show, how Jeffrey Epstein leveraged his elite network to make financial investments.

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4:13We know that Jeffrey Epstein made hundreds of millions of dollars advising a few billionaire clients. But his other income is still somewhat of a mystery.

4:25Most of Epstein's wealth came from advising billionaires like Leon Black, who ran a private equity juggernaut Apollo, and Les Wexner, who oversaw L Brands, which owns Victoria's Secret, and a number of other retailers. and he made a lot of money advising them over the years. And his estate, when he, according to court papers, filed after Epstein's death, put his worth at at least$577 million, which includes his private island and properties. That's a lot of money. It is. And then also, I mean, even the work that he was doing, at this point, it's still not extremely clear as to why he was being paid so much for that work.

5:11Because in the market, usually those services often are much cheaper than what it seems like he was being paid. Yes, that's been a big question over the years and subject to a lot of, I think, elements of lawsuits and investigations. And it's hard to fully divorce what Epstein was doing with trafficking women and trying to, like, understand his whole empire because he had a lot of things going on at once. And oftentimes, not always, his relationships with different people, you know, would have this like sort of business component. And then also sometimes a social or like sexual component. But also now based on your reporting, it's clear that he was also to some degree making money in the stock market.

5:53He was, yes. And it's really interesting to see how sometimes he would get tips and then somewhat soon after would advise his bankers or his accountant to purchase shares of these companies that he was getting information about.

6:11One of the people Epstein was getting tips from was Boris Nikolic. He was a close advisor to Bill Gates. Boris Nikolic started working for Bill Gates at the Gates Foundation in the mid-2000s. Nikolic was advising Bill Gates on tens of millions of dollars in investments, and his specialty was to go and scout for investments and then often work with Bill and help him decide where he should be investing, especially in health care and biotech companies. In the emails, Emily discovered that Nikolic exchanged hundreds of messages with Jeffrey Epstein during this time, including about a company called Foundation Medicine in 2012.

6:50That is the time when Nikolic started emailing Jeffrey Epstein about this molecular diagnostic testing company called Foundation Medicine. And it is also around the time that Bill Gates took a significant stake in that startup. And so what information was being shared between Nikolic and Epstein during this time period? So we know that at this time, Bill Gates and Nikolic are receiving access to non-public information about companies that they invest in. We know that happened with Foundation Medicine. Nikolic, in turn, sent some documents discussing the investment to Jeffrey Epstein. And over time, there's kind of this drumbeat of emails that Nikolic is sending to Epstein discussing Gates' investment in Foundation Medicine.

7:40and attaching some documents and financial terms about Bill Gates' investment. And what did Epstein do with that information? So Foundation Medicine goes public in September of 2013. And in January 2014, Epstein tells his finance people to buy 25 ,000 shares of Foundation Medicine. Epstein paid just over$27 per share. About two days later, Nikolic emailed Epstein. Did you see Foundation Medicine? Question mark. You probably made around 30 % in last two days, exclamation point. The company is coming with a number of new products. I do think it might hit post-IPO 42 again soon. In other words, it's going to keep going up.

8:25That's what it indicates in those emails. It was clear that Nikolic knew that Epstein had invested in this company and then was kind of like goading him on. I mean, him saying, like, you probably made around 30 % in the last two days with an exclamation point is, to me, very telling. And we could see him sending information, some of it public and some of it not.

8:53By 2015, Epstein had doubled his holdings to 50 ,000 shares. And his average purchase price was at just over$25 a share. That year, the Swiss drugmaker Roche bought just over half of Foundation Medicine's shares for$50 each. And a couple years after that, Roche bought out the company's remaining stock for$137 a share. It's not clear how much money Epstein made, or if he made any money at all, off the Foundation Medicine investment, because we don't know how long Epstein held onto his stock. It's possible he sold it before the final Roche buyout. According to Emily's reporting, Nikolic shared information with Epstein or his staff about at least three other private companies, including documents marked confidential, like board meeting minutes, resolutions, and company balance sheet information.

9:45Nikolic said in a statement to the journal that, quote, he did not share material non-public information, and that what he passed along to Epstein was either public information or private information that he was authorized to share. He added, quote, if Epstein invested, he did so on the public markets when anybody could invest. It's not clear why Nikolic shared this information with Epstein. But it is clear that the two men were tied up in more matters than just sharing investment ideas. In fact, during that same time, Nikolic was in the process of leaving Bill Gates' private office. And Epstein inserted himself into the negotiations.

10:23What we found in these Epstein files is that that's when Nikolic essentially needs to separate himself from Bill Gates' private office. There's this whole dust-up, and Epstein gets involved in kind of brokering Nikolic's exit, which is a multimillion-dollar exit. And Epstein's dangling allegations about Gates' extramarital affairs while he's putting this deal together. And ultimately, Gates agreed to invest tens of millions of dollars into a venture with Nikolic. And there's all this kind of term sheets and deals and wrangling happening where Epstein is serving as Nikolic's representative to get all this to happen.

11:04In a recent town hall at the Gates Foundation, Bill Gates acknowledged that he had two affairs with Russian women that Epstein later discovered. But he said they didn't involve Epstein's victims. Nikolic said he was authorized to provide some confidential information to Epstein while his exit from Gates' private office was being negotiated. When we asked Nikolic why Jeffrey Epstein was negotiating on his behalf as he was exiting Bill Gates' private office, he said, quote, Epstein was a master manipulator and I deeply regret associating with him. I now know his crimes were despicable and my heart goes out to the victims.

11:44He said Epstein inserted himself as a mediator and then used lies to pursue his own agenda. So I will just say, and it's important to note this, the capstone, I guess, of their rapport, Nikolic and Epstein, is that in 2019, just days before Epstein's death, while serving time in prison, Nikolic was named as a backup executor in Epstein's will. Nikolic said he didn't know he'd been named a backup executor in Epstein's will. A spokesperson for Gates didn't respond to requests for comment about the information sharing. The Gates spokesperson has said that when it comes to the negotiations over Nikolic's separation, quote, Gates has said he regrets his association with Epstein and wasn't aware of his crimes.

12:34There are other examples in the Epstein files of people sharing confidential information. One involved his longtime client, Leon Black. In 2015, Black was Apollo Global Management's CEO, and Epstein was advising Black on tax and estate planning. Emails released in the Epstein files show a conversation between Epstein and the CFO of Leon Black's family office about Apollo's finances. Epstein held 250 ,000 shares in the publicly traded company. In March of 2015, Epstein got an email that was marked confidential material non-public info. This was from the CFO of Leon Black's family office. And the email projected, among other things, that Apollo's cash distribution, which is equivalent to a dividend, for the first quarter of 2015 would be about 34 cents per share.

13:26And then when Apollo announced its quarterly earnings, two months later, the cash distribution was 33 cents a share. So he's getting information about a public company. The amount of a future dividend payout can impact whether someone buys or sells that company's stock, and knowing it ahead of time can give an investor an advantage. A spokesman for Black said Epstein provided tax and estate planning services for Black's family office and was given information about his holdings in Apollo for these purposes. I've got another example for you. This one involves Israel's former prime minister, Ehud Barak.

14:05Epstein's emails show that in 2016, Barack sent confidential information about a company he'd invested in. It was a tech startup called Reportee, where Barack was chair of the board. Ehud Barack sent an email to Epstein in January 2016. He shared minutes from a Reportee board meeting, and it showed the board had authorized the CEO to contact venture capitalists, raised$10 million, and Barack wrote, moving forward very well. What's wrong with sharing meeting minutes from a board meeting? When you're a board member, those are sacred. Those are not shared outside the boardroom. There's a very small number of individuals who are usually board members, and this is where they discuss all of the most confidential, sensitive information about a company, financials, personnel, strategy.

14:52And it's just known, like, you don't forward those around. It's just not the kind of information you share. A spokesperson for Ehud Barak said that Reportee was a private company, And because Epstein was one of its biggest early investors through a partnership led by Barack, Epstein was entitled to receive the information approved by the board. His spokesperson said that all of Barack's business activities, including Reportee, were conducted under careful legal advice and according to the law. After the break, Epstein's Inside Man at J.P. Morgan.

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17:08One of Jeffrey Epstein's valuable sources, according to Emily's reporting, appears to be Jess Staley, who was a senior J.P. Morgan executive until 2013.

17:21It seems like he was one of the most valuable insider sources for Jeffrey Epstein. Staley had a close relationship with Epstein, and they exchanged hundreds of emails over the years. In December 2009, Jess Staley shared with Jeffrey Epstein internal J.P. Morgan compensation deliberations, including that 34 people were expected to earn more than$10 million that year, and that Jamie Dimon, the CEO of J.P. Morgan Chase, shared information about his perspective on pay issues. What could Epstein have done with that information? Well, Ryan, soon after, Epstein actually bought J.P. Morgan preferred stock.

17:59And his financial statement showed that he held on to it for years. He owned millions of dollars of J.P. Morgan stock. So did his buddy give him access to buying preferred shares? Not access to preferred shares, but we know his buddy was giving him confidential information about a very large public bank. Information that suggested that the bank was going to do better in the future? You could, I guess, you know, take from that what you will. You know, he's getting bits and pieces and nuggets. One time Staley sent Epstein his comments on how an off-site executive retreat went. He also, and this one is a lot more direct, Staley sent Epstein inside information about other matters, including about clients.

18:41In 2010, Staley forwarded an email to Epstein that it details about an upcoming deal that J.P. Morgan was secretly working on. It involved the billionaire Pritzker family. Less than three weeks later, the deal went through. Do you know if Epstein did anything with this information? We searched far and wide. We couldn't directly see it. But that's not saying it didn't happen. Right. Because he was also invested in hedge funds, venture capital firms. Like, there are so many different avenues where he had investments and he had other people making investments. So we can't say what we don't know. I will tell you that a JPMorgan Chase spokeswoman said it wasn't aware of Staley sharing confidential information with Epstein until after Staley left the bank.

19:31Thomas Pritzker declined to comment. Jess Staley and his lawyer didn't respond to requests for comment. In the United Kingdom, two people who communicated frequently with Epstein were arrested for sharing confidential government information. What we have seen in the UK is that now former Prince Andrew was arrested, and so was the former UK ambassador to the US, Peter Mandelson, both because they shared confidential UK government information with Jeffrey Epstein. That's what it's hanging on for each of them. Former Prince Andrew was stripped of his royal title and is now known as Andrew Mountbatten-Windsor.

20:12He has denied wrongdoing in relation to his dealings with Epstein and said he regretted his associations with him. Both Mandelson and the former Prince Andrew have been released by the police. Neither has responded to requests for comment. The recent issues in the former Prince Andrew's case relate to when he was serving as special representative for international trade and investment for the UK government. In that position, the Epstein files appeared to show that he shared confidential information with Epstein. For example, in July 2010, then-Prince Andrew forwarded Epstein an email exchange that he'd had with an investment banker based in the United Arab Emirates.

20:48The emails had details regarding the restructuring of the Royal Bank of Scotland following its 2008 bailout. In Peter Mandelson's case, the former UK politician, the Epstein files show that he forwarded Epstein confidential government correspondence relating to Britain's financial crisis. For example, when Mandelson was the UK business secretary, he forwarded Epstein a confidential government email from an aide to the then prime minister. It was advising the government to draw down debt by selling some 20 billion pounds of assets. The heads up of a possible UK sale of assets could have allowed Epstein to possibly trade on the information.

21:26Mandelson has previously said in statements that deeply regrets his past association with Epstein. Beyond the UK, have there been consequences for any of the people we've been talking about for their ties to Epstein? Now, with some of these, so Jess Staley left, he became CEO of the huge global bank Barclays and left years ago over the ties to Epstein. And Ehud Barak, the former Israeli prime minister, ultimately stepped down from the board of that tech startup. It was in 2020 that the company said he was stepping down from the board. So, yes, people in some cases have lost their positions, their clout, their reputation.

22:09As for Boris Nikolic, after his ties with Epstein became public in 2019, he largely unwound the fund he'd started with the money that included tens of millions of dollars from Gates. I understand, obviously, what's in it for Epstein. This is great. Having information is valuable. But I still can't wrap my head around why anybody would be willing to share it with him. Isn't that part of the great mystery? Like, why are these people so loose with him? Why are they sharing these confidential, like, business matters with him? It doesn't really make sense. And I think this goes much further than ultra-wealthy people casually sharing tips about something at a cocktail party or at the golf course.

22:53because both with the volume of the information he was getting and the way that he acted on it. Now, don't get me wrong. He also had access to opportunities via hedge funds or venture capital firms and would make money from those. We saw that in the files. That's a little bit more normal among the ultra-wealthy. This takes it much further. From what Emily has seen in the files, most of the information flows one way, from insiders to Epstein. So what would you say, big picture, have you learned after reporting this story? I think that we have a deeper understanding of how many ways he entangled himself into other people's lives and not just with the sexual exploits, but also on the business side, even if he wasn't officially advising them.

23:45It shows that he also was doing things to like personally benefit himself and his own wealth, and that he was constantly trading information. People shared an unbelievable amount of information with Jeffrey Epstein. And it doesn't totally make sense how he was such a repository for so much confidential information, to the point that his email signature, Ryan, literally said, the contents of this message may constitute inside information. How many times have you ever seen that on somebody's email signature? It's usually when it's a lawyer. Hmm. And Jeffrey Epstein was not a lawyer. What are you looking for next in these millions of pages of Epstein files?

24:33If I told you, then all of my competitors would know too. I will just say that I am not done searching through these files.

24:53That's all for today. Thursday, March 26th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting this episode by Mark Maramont.