The agency described how Grout allegedly ignored Iksil’s requests to mark certain CIO positions within the latest bid- offer spreads available. As an example, the complaint stated that Grout told Iksil he was able to come up with a $4 million loss for March 16 last year with “lots of effort.” If Grout had followed Iksil’s marking request, the daily loss would have been greater than $100 million, the SEC said.
Internal e-mails have become a regular part of Wall Street court battles, with the government and defense attorneys arguing over which messages best reflect the thinking of bank employees.
A New York jury found Fabrice Tourre, an ex-Goldman Sachs Group Inc. trader, liable Aug. 1 in a lawsuit brought by the SEC over his role in selling a $1 billion investment that failed. The agency focused on Tourre’s e-mails to overcome his defense that as a junior employee he wasn’t primarily responsible for the deal.
A Brooklyn jury in 2009 found two former Bear Stearns Cos. portfolio managers not guilty of defrauding investors by improperly touting the health of funds made up mostly of subprime mortgage-backed securities. After the trial judge barred prosecutors from presenting a key 2006 e-mail, jurors acquitted the men, saying other e-mails shown by the government were ambiguous.
Grout and Martin-Artajo remain in Europe, facing as long as 20 years in prison if convicted of the most serious counts. Grout, a French citizen, moved to France this year and hasn’t been arrested.
Martin-Artajo was on vacation when prosecutors unsealed the criminal charges Aug. 14, according to a statement that week from his attorneys at Norton Rose Fulbright LLP. He turned himself in to Spanish police Aug. 27, a police official there said at the time. Martin-Artajo was released on bail in Madrid and said he was unwilling to be extradited, a spokeswoman for the National Court said.
The criminal cases are U.S. v. Grout, 13-MAG-01976, and U.S. v. Martin-Artajo, 13-MAG-01975, U.S. District Court, Southern District of New York (Manhattan). The SEC case is Securities and Exchange Commission v. Martin-Artajo, 13- cv-05677, U.S. District Court, Southern District of New York (Manhattan).
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