Two former traders at JPMorgan who were at the centre of the bank’s $6.2 billion (£3.9 billion) “London Whale” losses have been indicted in a US court for hiding huge trading losses.
Javier Martin-Artajo, who oversaw the trading strategy carried out by the Whale Bruno Iksil, and Julien Grout, a trader who worked alongside him, have been charged on five criminal counts. They include conspiracy, securities fraud and filing false books and records.
The charges were made public as JP Morgan prepares to pay at least $750 million to US and UK regulators to settle investigations into its record loss made in the bank’s London chief investment office. The US claims that between March and May 2012 the two men “manipulated and inflated the value of position markings in the Synthetic Credit Portfolio in order to achieve specific daily and month-end profit and loss objectives”.
The charge continued: “In other words, they artificially increased the marked value of securities in order to hide the true extent of significant losses in that trading portfolio.”
Prosecutors said the men did this to enhance their promotion and bonus prospects.
Iksil has not been charged with any criminal offence and has been co-operating with US authorities.
Lawyers for Martin-Artajo and Grout did not immediately respond to requests for comments.