Apollo Global Management, Founders Face Shareholder Lawsuit Over Epstein Ties
By Jonathan Stempel and Isla Binnie
NEW YORK, March 2 (Reuters) — Apollo Global Management Inc. and its billionaire founders Leon Black and Marc Rowan were sued on Monday by shareholders in a proposed class action. The lawsuit accuses the private equity giant of concealing its business relationship with the late Jeffrey Epstein for nearly five years, an alleged deception that shareholders claim wiped billions from the firm's market value.
The complaint, filed in Manhattan federal court, states that Apollo made false denials in regulatory filings in 2021 and 2022 about ever conducting business with Epstein. This contradicts evidence, the suit alleges, that shows Epstein was "heavily involved" and in frequent communication with Apollo's senior leadership regarding the firm's business throughout the 2010s.
Shareholders point to a roughly 15% drop in Apollo's stock over three weeks in February, erasing about $12 billion in market capitalization, as the truth about the Epstein connections emerged publicly.
A spokesperson for Apollo and CEO Marc Rowan declined to comment. Whit Clay, a spokesperson for Leon Black, also declined to comment. Rowan succeeded Black as chief executive in 2021.
In a February 18 letter to clients, Apollo stated that neither Rowan nor anyone else at the firm besides Black had a business or personal relationship with Epstein. The letter acknowledged that "in select instances," Rowan and other employees provided information to Epstein related to tax work he performed for Black, but insisted that any attempts by Epstein to work for other Apollo founders were "declined at every turn." Black has previously denied any wrongdoing and stated he was unaware of Epstein's criminal conduct.
The lawsuit, led by shareholder Solomon Feldman, references a January 2021 review by the Dechert law firm, which Apollo cited in its filings. That review found Black paid Epstein $158 million for tax and estate planning but claimed Apollo never retained Epstein and Epstein never invested in Apollo funds. Shareholders allege these assurances were proven false following the U.S. Department of Justice's January 30 release of a trove of documents related to Epstein.
Broader Fallout and Sector Pressures
The complaint cites media reports detailing Epstein's alleged communications with Apollo officials in the mid-2010s, as well as demands from teachers' unions for a U.S. Securities and Exchange Commission investigation. The legal action seeks to represent investors who purchased Apollo stock from May 2021 onward. Although Black had stepped down as CEO and chairman by then, the lawsuit holds him liable as a "control person" due to his 7% stake in the company.
Apollo's February decline occurred amid a broader, months-long slide for large alternative asset managers. Investors have grown wary of the sector's growth prospects, underwriting standards in private lending, and potential disruption from AI to software businesses in their portfolios.
Jeffrey Epstein died in a Manhattan jail in August 2019 while awaiting trial on sex trafficking charges. His death was ruled a suicide by the New York City medical examiner's office.
Reaction & Analysis
"This lawsuit underscores a critical failure in corporate governance and transparency," said Michael Thorne, a financial ethics professor at Columbia University. "Shareholders have a right to know about relationships that carry profound reputational and legal risks, especially one as toxic as Epstein's. Apollo's regulatory filings appear to have been carefully worded but potentially misleading."
"It's outrageous. This isn't just about bad PR; it's about fraud," said Lisa Moreno, a retired teacher and pension fund beneficiary. "They knew. The leadership knew who they were dealing with for years, hid it, and our retirement savings took the hit. There must be accountability beyond just a lawsuit."
"The market reaction seems disproportionate, blending the Epstein news with wider sector anxieties," noted David Chen, a partner at hedge fund Astra Capital. "While the allegations are serious, the legal process will determine liability. The bigger question for investors is how this affects Apollo's ability to raise future funds and retain key talent."
"The timeline is damning," added Sarah Jensen, a legal analyst with Bloomberg Intelligence. "The fact that the alleged misleading statements continued well after Epstein's death and Black's departure suggests a systemic effort within Apollo to distance itself from a relationship it knew was deeply problematic."
(Reporting by Jonathan Stempel and Isla Binnie in New York; Editing by Noeleen Walder and Christian Schmollinger)