Tortuous extradition process awaits Spaniard in JPMorgan 'Whale' case

Wed Aug 28, 2013 1:26pm EDT
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By Sarah White and Clare Hutchison

MADRID/LONDON (Reuters) - By getting arrested in his native Spain rather than his former London workplace, ex-JPMorgan Chase (JPM.N: Quote) trader Javier Martin-Artajo has gained time in his struggle to avoid being extradited to New York over a $6.2 billion trading scandal.

But he may just be postponing the inevitable, extradition lawyers say.

Martin-Artajo, detained in Madrid on Tuesday and later granted a conditional release, has said he will resist being sent to the United States, where prosecutors accuse him of hiding hundreds of millions of dollars in losses.

The Spaniard was the London supervisor of Bruno Iksil, nicknamed the "London Whale" for the big derivatives bets that led to last year's losses at JP Morgan.

The scandal dented the reputation of the bank, the largest in the United States, which had weathered the global financial crisis better than most competitors. Its problems have since grown, and it is also embroiled in a federal bribery investigation and is facing multi-billion dollar lawsuits over subprime mortgages.

Iksil is cooperating with U.S. prosecutors and has not been charged, while Frenchman Julien Grout, a junior colleague, has been charged but not arrested. Martin-Artajo is the most senior figure arrested so far.

Lawyers expect the case to drag out, though in principle he is eligible for extradition because the alleged offences are also punishable in Spain.

"Whilst the extradition process is known to be slow and tortuous .... it is difficult to see at this stage how extradition can realistically be avoided," said James Carlton, a partner at London-based law firm Fox Williams.   Continued...