Child welfare officials think a notorious Wolf of Wall Street-style banker and his alcoholic wife are just fine parents — but a Manhattan judge handling their divorce begs to differ.

“These innocent children have been caught up in a horrible, horrible fiasco,” Justice Matthew Cooper said of the ordeal involving ousted Jefferies & Co. exec Sage Kelly, his estranged spouse Christina Di Mauro and their 6- and 10-year-old girls.

Cooper said the duo permanently scarred their young children in their bitter custody battle, which started last summer when Kelly allegedly planted hidden cameras in the couple’s Fifth Avenue home to catch his wife chugging beers and snorting cocaine.

When the judge granted temporary custody of the girls to Kelly, di Mauro filed public court papers outside the sealed divorce proceeding outing her hubby and his high-profile banker buddies as two-timing, whoring drug addicts.

The documents became a must-read on Wall Street, with one source calling the filing “a complete bombshell and a shocking and wild read.”

In one titillating incident, di Mauro, 39, claimed her husband, 42, convinced her to have sex with an industry contact, Aegerion Pharmaceuticals head Marc Beer, to bring in more business.

The former Ralph Lauren event planner said that booze- and cocaine-greased escapade unfolded at the Ritz-Carlton in Boston in 2012, according to court papers.

“Soon, Sage and I were having sex with each other on one bed, and Marc and his girlfriend were having sex on the other bed,’’ Christina says in her affidavit.

“Then, Marc said, ‘Let’s switch,’ ” she claims in the papers. “Marc suggested that his girlfriend and I have sex with each other.

“Mindful of [Sage’s] goal of securing business from Marc, I felt responsible not to disappoint Marc. So, his girlfriend and I had sexual contact for a few minutes, while Marc and Sage watched.

“Then, Marc’s girlfriend joined Sage on our bed, and Sage and she started to have sexual relations.

“Then, I joined Marc on his bed, and he and I engaged in sexual relations,’’ Christina says in the sworn statement.

Beer has called the allegations false.

The estranged couple was in court Thursday to finalize a divorce settlement. Cooper heard from two Administration for Children’s Services officials who had conducted an investigation and wrote a report after the criminal allegations were made public.

“At this point, ACS is not taking an action,” Cooper said.

Still, the judge said the children “will forever be able to read about the allegations” online, “the sort of information children should never be able to see.”

Besides the Ritz incident, di Mauro says in court papers that Kelly had sex in the shallow end of their Sag Harbor pool, within sight of one of the children’s bedrooms.

The $7 million-a-year former head of the pharmaceuticals division of Jefferies allegedly hosted a “Mushroom Day” in the Hamptons, when “he continually ingested [psychedelic] mushrooms through the day … while the children were present.”

He also urinated and defecated on himself in bed, the affidavit says.

Di Mauro herself is less than a model parent. She was arrested for driving drunk with her daughters, then 6 and 2, in 2010. She crashed her Range Rover through two utility poles and into a tree in the Hamptons.

In court papers, she admits to having a drug and alcohol problem in the past.

Cooper, who’s handled breakups for A-listers from actor Richard Gere to NBA star Paul George, said the case was unlike anything he’d faced before.

“The end result, I understand, is that Mr. Kelly lost his job,” the judge said.

“This ended up as horrible as it can be for Mr. Kelly and I guess to some extent for Ms. Kelly, but most of all for the children,” Cooper said.

Kelly, who left the courtroom smiling, declined to comment. But a friend told The Post he’s very happy with the settlement.

Meanwhile, a straight-faced di Mauro refused to answer questions from reporters.