From The New York Times:
Government authorities are planning to arrest two former JPMorgan Chase employees suspected of masking the size of a multibillion-dollar trading loss, a dramatic turn in a case that tarnished the reputation of the nation’s biggest bank and spotlighted the perils of Wall Street risk-taking.
The arrests are expected to take place in London in the coming days, according to people briefed on the matter. The action, the people said, would come on the heels of a federal grand jury voting to indict the employees on criminal fraud charges.
The employees — Javier Martin-Artajo, a manager who oversaw the trading strategy from London, and Julien Grout, a low-level trader responsible for recording the value of the soured bets — could ultimately be extradicted under an agreement with British authorities.
http://dealbook.nytimes.com/...
News of the arrests comes only two days after JP Morgan admitted that they are currently the focus of both criminal and civil investigations into their trading practices. From RT.com:
The biggest US bank is under investigation by the country's Department of Justice over whether it knowingly sold shoddy mortgage bonds prior to the financial crisis and is in violation of securities laws.
JPMorgan Chase announced Wednesday in a quarterly regulatory filing it is under criminal and civil investigation. The bank “continues to respond to other MBS [mortgage-backed security] related regulatory inquiries," the filing said.
The US’s largest bank is responding to the ‘parallel investigations’ by both the US Attorney’s Office and the Eastern District of California for overstating the quality of mortgages they sold to investors between 2005 and 2007, Reuters reports.
http://rt.com/...
There is also news that the S.E.C. is currently pressuring JP Morgan for an admission of wrongdoing in the London Whale case. From The Washington Post:
The Securities and Exchange Commission is negotiating a settlement with JPMorgan Chase in which the bank would be required to admit wrongdoing in its handling of a multibillion-dollar trading loss initiated by one of its traders, a person familiar with the matter said.
If the SEC gets its way, the deal would apply a standard recently unveiled by SEC Chairman Mary Jo White that demands an admission of misconduct in certain types of civil settlements. The agency has routinely used boilerplate language that allows defendants to pay fines without acknowledging liability, a policy that has been criticized by some judges.
http://www.washingtonpost.com/...
Update 1:
From Notreadytobenice in the comments:
When I googled Julien Grout he seemed to be...
warning bosses of the shit going down. Why are they indicting this mush? Seems like a whistleblower. This in huffington:
Over subsequent weeks, Grout followed orders even as the losses swelled. But on March 9, 2012, he explicitly challenged his immediate boss while accusing Iskil of making him complicit in what he portrayed as egregious accounting fraud, according to the report.
http://www.huffingtonpost.com/...
by Notreadytobenice on Fri Aug 09, 2013 at 10:43:15 PM EDT