Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
NEW YORK (AP) — The U.S. government said Friday it is seeking dismissal of criminal charges against two ex-traders at JPMorgan Chase & Co. in a scandal that caused over $6 billion in losses after a trader known as the "London Whale" became an unreliable witness.
Acting U.S. Attorney Joon Kim said in a release that his office made the request to a judge in Manhattan federal court in the case against Javier Martin-Artajo, a Spanish citizen, and Julien Grout, a French citizen. Both traders, through their lawyers, have denied any wrongdoing.
Both are former derivatives traders who were criminally charged in September 2013 with conspiring to falsify books and records of JPMorgan, wire fraud and making false filings to the Securities and Exchange Commission. Prosecutors said they conspired to hide losses in a credit derivatives trading portfolio at JPMorgan. Derivatives are investments whose value is based on some other investment, such as oil or currencies.
The U.S. government was unable to extradite the men and other efforts to secure their appearance were "unsuccessful or deemed futile," prosecutors said in court papers. A court in Spain rejected the Martin-Artajo extradition request in April 2015 and Kim said it had already been determined that efforts to extradite Grout from France would have been futile.
Kim said prosecutors sought charges against Martin-Artajo and Grout based on the expectations that ex-JPMorgan trader Bruno Iksil, who earned his nickname by making outsize bets, would be a trial witness.
"Based on a review of recent statements and writings made by Iksil, however, the government no longer believes that it can rely on the testimony of Iksil in prosecuting this case, even if the defendants appeared," the government said.
Martin-Artajo supervised the New York-based bank's trading strategy in London. Grout, his subordinate, was in charge of recording the value of the investments each day.
In 2013, JPMorgan agreed to pay a $100 million penalty and admitted that its traders acted "recklessly" during a series of London trades that ultimately cost the bank over $6 billion.
The trading losses surfaced in April 2012 and shook the financial world, along with JPMorgan's reputation.
In a March article in Financial News, Iksil was quoted as saying during an interview at his home 50 miles south of Paris that he was a pawn in the financial scandal and that he had tried to warn JPMorgan executives of impending peril.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
