Former JP Morgan “London Whale” Banker Taken Into Custody

Former JP Morgan “London Whale” Banker Taken Into Custody

The former credit and equity trading head at the investment office of JP Morgan gave up to the authorities, according to Spanish police. He was arrested due to his role in the “London Whale” trade.

Javier Martin-Artajo is facing charges of attempting to hide huge losses in connection to the “London Whale” trade. The National Court, which handles significant international crimes, will handle the case of Artajo. Artajo and Julien Grout were charged in the US for planning to hide losses reaching $500 million. The charges were connected to complex derivatives trade that went awry.

Losses for JP Morgan eventually reached $6 billion following the trades.

Bruno Iksil provided evidence about the trades to US authorities to escape prosecution. He also agreed to provide a testimony to a trial in connection to the losses. Among the criminal charges that will be filed against the perpetrators include conspiracy, wire fraud and falsifying records, books, and SEC filings.

Artajo reportedly directed Grout to conceal the losses after it started to increase in 2012 from the management of the company. It resulted to an overstatement in the first quarter earnings by the bank. Artajo revealed his confidence of being exonerated in a statement he released through Norton Rose Fulbright near the start of the month.

No statements were released by JP Morgan.

Concerns increased on the stability of major banks following the losses, which also affected federally insured deposits.

A Senate committee reported last March indicating that the bank ignored several indicators of increasing threats, avoidance of federal insight, manipulation, and misguided regulators, investors and the public on the risks linked to derivatives trading.

The bank was directed to enhance its internal auditing and risk management by federal regulators last January due to the losses. During that time, no monetary penalty was imposed on JP Morgan, which concurred with the order without any admission or denial of any misconduct.

Posted by James Fried on Wednesday August 28 2013, 3:29 AM EST. Ref: CNN. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0