Ex-JP Morgan employees indicted in USD6 billion trading loss
Federal prosecutors formally charged the two JP Morgan traders involved in the "London Whale" trades in Manhattan court today. Javier Martin-Artajo and Julien Grout were booked on false filings, conspiracy and wire fraud charges as discovered in complaints that were unsealed in court. Martin-Artajo and Grout, who worked under the former, found ways to manipulate the derivatives portfolio to their desired figures, according to affidavits from the FBI.
Court documents also disclosed that Securities and Exchange Commission had also filed a civil case against Martin-Artajo and Grout.
The "London Whale" scandal occurred from March to May of 2012. It was termed as such because French trader Bruno Iksil's manipulated portfolio was deemed "large". Iksil worked under Martin-Artajo, and had carried the portfolio manipulation out.
Jamie Dimon, JP Morgan's Chief Executive Officer, took part in recuperating the USD6.2 billion loss by taking a pay cut. Bank employees who were involved in the scandal paid an accumulative USD100 million in pay cuts as well. The bank also had to retract and issue a new earnings statement dated April 13, 2012.
US Attorney Preet Bharara have scheduled a news conference to discuss about the state's case against the traders at 2pm. Lawyers of the two ex-traders said that Martin-Artajo and Grout are not in hiding.