JPMorgan's former 'London Whale' supervisor arrested in Spain
By Sarah White and Carlos Ruano
MADRID (Reuters) - Spanish police arrested former JP Morgan Chase trader Javier Martin-Artajo on Tuesday as he prepares to fight possible extradition to the United States over a $6.2 billion financial scandal at the United States' largest bank.
The arrest came after the United States charged Spaniard Martin-Artajo and a junior colleague, Frenchman Julien Grout, with wire fraud and conspiracy to falsify books and records related to the trading losses, which were executed by Bruno Iksil.
Iksil, who was nicknamed the "London Whale" for his large bets on derivatives markets, is cooperating with U.S. prosecutors and has not been charged.
Martin-Artajo was released on condition he stays in Spain and checks in regularly with a court. A judicial source said on Tuesday he had told a Spanish court he is unwilling to be sent to the United States to face the charges.
Martin-Artajo, who handed himself in at a Madrid police station after being contacted by police, is accused of trying to inflate the value of trading positions held on his group's books. The mismarking allegedly took place as the traders tried to hide mounting losses in an illiquid derivatives market, where they had made outsized bets.
Martin-Artajo was Iksil's supervisor at JP Morgan's Chief Investment Office in London.
JPMorgan is battling to salvage its corporate image amid a swirl of litigation and investigations in the wake of the financial crisis, including a federal bribery investigation into whether it hired the children of key Chinese officials to help it win business.
The bank's boss Jamie Dimon attempted to dismiss the London Whale losses as a "tempest in a teapot" but this remark has come back to haunt him. Continued...