Former JPMorgan bankers charged in $6.2 billion loss probe

Extradition Issues

The age and nationality of the defendant, the severity of the charge and the type of punishment that’s expected all factor into a decision to extradite, said Robert J. Anello, a partner at Morvillo Abramowitz Grand Iason & Anello PC in New York.

“While it is more difficult to get an extradition from France than from the U.K., it is not impossible,” Anello said.

New York-based JPMorgan sued Martin-Artajo in a London court last October, without detailing its complaint in filings. That lawsuit was settled, a person with direct knowledge of the case said in January.

JPMorgan is negotiating the final terms of a deal with the SEC to end its yearlong probe of the trading loss, two people briefed on the talks have said. While the SEC may target some people involved in the trades, top executives probably won’t face claims they lied to or misled the public, the people said.

Escalate Concerns

The SEC may sue the firm for failing to enact proper controls, supervise workers, escalate concerns and share information internally, one person said.

The U.K.’s FCA is investigating whether JPMorgan provided the regulator with enough information about the risk the bank was taking, a person briefed on the matter said. A decision probably won’t come until the end of the year, the person said.

JPMorgan released its own internal report on the trading loss in January, which found an “error prone” risk-management system, traders overwhelmed by the complexity of their bets, and managers including Dimon who weren’t aggressive enough in halting the losses.

The bank still made a record $21.3 billion in profit last year.

In March, a Senate subcommittee accused JPMorgan in a 301- page report of hiding losses, deceiving regulators and misinforming investors. Drew, who ran the CIO, and her head of international CIO, Achilles Macris, left the company along with other top executives. The bank clawed back more than $100 million in pay from Drew and other managers.

Senate Report

The Senate subcommittee, led by Michigan Democrat Carl Levin, referred its findings to the SEC and Justice Department in April.

“There is reasonable cause to believe a violation of the law may have occurred,” Levin said at the time.

The FBI and the SEC scrutinized public statements, calls with investors and an April 2012 earnings presentation by Dimon and then-Chief Financial Officer Douglas Braunstein, according to five people with knowledge of the probes.

Investigators also reviewed, among other issues, whether London traders painted the tape, a form of market manipulation that allows them to inflate the value of their positions, three of the people said at the time.

The cases are U.S. v, Grout, 13-MAG-01976, and U.S. v. Martin-Artajo, 13-MAG-01975, U.S. District Court for the Southern District of New York (Manhattan)

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