The case of JPMorgan’s London Whale reached a new milestone when U.S. prosecutors brought charges on August 14 against two former JPMorgan traders implicated in the massive cover up of a $6 billion loss in derivatives bets. Bloomberg reports that Javier Martin-Artajo and Julien Grout, former traders in JPMorgan’s Chief Investment Office (CIO) in London, were charged with conspiracy, wire fraud and making false filings.
Notable omissions are Bruno Iksil, the London Whale himself, and anyone from the executive ranks at JPMorgan. Iksil is cooperating with U.S. authorities and has been granted immunity. Chairman and CEO Jamie Dimon and other members of senior management have improbably claimed no knowledge of the cover up. The case highlights the role of JPMorgan’s valuation control group in overseeing the internal values the CIO placed on the derivatives in question: the traders were allowed to mark the price for the derivatives beyond the established price range, which allowed them to cover the losses.
Summary of London Whale investigations:
- DOJ Civil Complaint against Javier Martin-Artajo
- DOJ Civil Complaint against Julien Grout
- DOJ Immunity agreement with Bruno Iksil
- SEC Complaint against Martin-Artajo and Grout
- March 15, 2013 Senate Permanent Subcommittee on Investigation report, JPMorgan Chase Whale Trades: A Case History of Derivatives Risks & Abuses
Until the whales in the executive office are charged, there will be no justice. It is up to the Department of Justice and the SEC to finally apply the law without fear or favor to the wealthy, powerful and well-connected of Wall Street.
The following press release, blog posts and interviews from Better Markets have more on the London Whale:
- Arresting Two Mid-Level Employees at a Too-Big-to-Fail Wall Street Bank is a Good Start, But Only Holding Senior Executives Accountable Will Stop the Wall Street Crime Spree (Aug. 14, 2013)
- It’s Not a Good Day for JPMorgan, Dimon: Dennis Kelleher on Bloomberg TV (Aug. 14, 2013)
- Jamie Dimon’s Motive to Lie (Mar. 19, 2013)
- Jamie Dimon: Out of Control (Mar. 17, 2013)
- New Graham Fisher & CO. Report on JPMorgan Chase: Out of Control (Mar. 13, 2013)
- Jamie Dimon’s Leadership Lesson: Talk a Lot, Say Little, Blame Others (Jan. 2, 2013)
- The Volcker Rule, Jamie Dimon & the Whale’s Splash (Jun. 24, 2012)
- JPMorgan’s CEO Jamie Dimon: Incompetent or Culpable? (May 15, 2012)
- Kelleher on JPMorgan “London Whale” Trading Losses, Bloomberg TV (Jul. 13, 2012)
- Better Markets on JPMorgan Trading Loss, Fox Business News (Jul. 13, 2012)
- JPMorgan Chase’s Big Losses, Big Risk, PBS NewsHour (Jun. 13, 2012)
For more, visit the Better Markets Newsroom for comprehensive media coverage of the London Whale.
