April 2, 2014 / 8:54 PM / 5 years ago

Ex-JPMorgan trader in 'Whale' scandal open to facing U.S. charges

NEW YORK (Reuters) - A lawyer for a former JPMorgan Chase & Co trader accused of helping to hide trading losses tied to a $6.2 billion financial scandal said on Wednesday his client was open to leaving France to voluntarily face U.S. criminal charges.

A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013. REUTERS/Mike Segar

Julien Grout, the former trader, is accused of participating in a conspiracy to hide losses within JPMorgan’s Chief Investment Office in London by marking positions in a credit derivatives portfolio at inflated prices.

He and another one-time trader at the bank, Javier Martin-Artajo, are considered fugitives by the U.S. government for not coming to the United States to face trial over charges stemming from the so-called London Whale scandal.

But at a hearing in federal court in New York, Marc Weinstein, a lawyer for Grout, told U.S. District Judge George Daniels that talks were under way with prosecutors about a bail package that would enable Grout, a French citizen, to come to the United States.

“We certainly have been making efforts on Mr. Grout’s behalf to get him here to face these charges,” Weinstein said.

Details of the bail negotiations came during a hearing in a parallel civil lawsuit brought by the U.S. Securities and Exchange Commission against Grout and Martin-Artajo.

In court papers, Grout’s lawyers say he would come to the United States to face charges if he received a bail package that would allow him to return to France while awaiting trial.

If a bail package is negotiated, Grout would be the first of the two defendants to submit to U.S. jurisdiction. Martin-Artajo who lives in Spain, has been fighting extradition. Both men deny wrongdoing.

Last year, JPMorgan agreed to pay more than $1 billion to settle U.S. and British regulatory probes into the London Whale losses and admitted wrongdoing.

Grout, who ceased working for JPMorgan in London in December 2012, has been out of work since then, his lawyers said in court papers. He moved into his parents’ country home in France in July 2013, the lawyers wrote.

He and Martin-Artajo were indicted in September on charges including securities fraud, wire fraud and conspiracy.

Edward Little, another lawyer for Grout, said after Wednesday’s hearing that the U.S. government was not open to allowing his client to return to France during trial.

Little also said he might follow a suggestion Daniels made at the hearing to ask the judge overseeing the criminal case, U.S. District Judge Lorna Schofield, to weigh in on the bail dispute.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined comment.

The cases in U.S. District Court, Southern District of New York, are U.S. v. Martin-Artajo, No. 13-cr-00707, and Securities and Exchange Commission v. Martin-Artajo, No. 13-05677.

Reporting by Nate Raymond in New York, editing by G Crosse

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