Jeffrey Epstein's only tie to St. Joe Minerals was as a fact witness in the Securities and Exchange Commission's (SEC) insider-trading inquiry that followed Seagram's unsolicited $2.07 billion tender offer announced on March 11 1981.1
Working on Bear Stearns' options desk, Epstein handled foreign customer accounts that generated some of the suspicious pre-bid purchases. The SEC deposed him under oath on April 1 1981 to determine whether he traded personally, tipped others, or could identify the source of the leak. He denied wrongdoing and was never charged — the enforcement action ultimately focused on Swiss-based trader Giuseppe Tome and associates.
Timeline
Tender Offer and Suspicious Trading
Seagram's public bid pushed St. Joe Minerals shares from the low 40s overnight. Brokerage records showed heavy buying through Swiss banks and Bear Stearns in the two weeks before the bid, prompting the SEC to open Formal File No. NY-5395.5
Epstein's Position at Bear Stearns
Epstein became a limited partner in 1980 and specialized in stock-index and merger-arbitrage options for wealthy overseas clients. He resigned abruptly on March 12, 1981, the day after the Seagram announcement, citing a dispute with management. Former colleagues later said the resignation coincided with — but was not compelled by — the unfolding inquiry.2
SEC Deposition on April 1 1981
During three hours of testimony, Epstein stated he neither traded St. Joe securities nor shared inside information. He told investigators he had only "hearsay" knowledge that other representatives placed St. Joe options orders. The SEC treated him as a cooperative witness and did not accuse him of misconduct.3
Outcome of the Case
The SEC sued Tome and two associates in the Southern District of New York. Judge Milton Pollack's June 4 1986 opinion held the trio liable for trading on non-public tender-offer information and ordered disgorgement of $4.9 million plus interest.4
No Bear Stearns employee, including Epstein, faced civil or criminal charges.