Former JPMorgan bankers charged in $6.2 billion loss probe

‘Artificially Increased’

Martin-Artajo, Grout and unidentified co-conspirators at the bank “artificially increased the marked value of securities in order to hide the true extent of hundreds of millions of dollars of losses in that trading portfolio,” the U.S. said.

Attorneys for Martin-Artajo and Iksil declined to comment on the charges. Grout’s lawyers didn’t immediately respond to a request for comment.

Martin-Artajo was Iksil’s supervisor while Grout assisted him in valuing his trading book. JPMorgan ousted all three last year and sought to recoup some of their pay.

The Justice Department and the Federal Bureau of Investigation had been probing the trade for more than a year to determine whether employees at JPMorgan’s chief investment office attempted to inflate the value of trades on the bank’s books by mismarking them, a person with knowledge of the matter has said.

Edward Little, a partner at Hughes Hubbard & Reed LLP in New York who represents Grout, said in an Aug. 12 interview that his client was living in France and isn’t a fugitive.

Job Hunt

“He visited the U.S. last month with confidence he was not being indicted and moved to France to save money and look for a job,” Little said.

Martin-Artajo was on vacation, his attorneys at Norton Rose Fulbright LLP in London said in an Aug. 13 statement.

He “received no communication from any governmental regulators, including the Financial Conduct Authority in the U.K. with whom he has fully cooperated, which would indicate that he should not be on vacation at this time,” they said.

Martin-Artajo has cooperated with every investigation required in the U.K. and is confident he will be cleared of wrongdoing when a “fair reconstruction of these complex events is completed,” the lawyers said in the statement.

Unless the defendants surrender to authorities, the U.S. will probably have to seek to have them extradited.

U.S. treaties with France and Spain give those countries discretion to decline to extradite their own citizens, said Evan T. Barr, a lawyer at Steptoe & Johnson LLP.

<< Page 2 of 3 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome