EagleTribune.com, North Andover, MA

Merrimack Valley

September 20, 2013

JPMorgan admits fault, pays $920M in trading loss

(Continued)

The fallout even ensnared Dimon, who initially dismissed reports of the losses as a “tempest in a teapot.” He later acknowledged the magnitude of the losses, admitted to Congress that the bank failed in its oversight and took a multi-million-dollar pay cut.

Three employees in the London office were fired — two senior managers and a trader. The episode also led to the resignation of Ina Drew, the former chief investment officer overseeing JPMorgan’s trading strategy.

Federal prosecutors in New York filed criminal charges last month against Javier Martin-Artajo and Julien Grout. Martin-Artajo supervised the bank’s trading strategy in London, and Grout, his subordinate, was in charge of recording the value of the investments each day. They were charged with conspiracy to falsify books and records, commit wire fraud and falsify filings to the SEC. They also were charged separately in an SEC civil complaint.

Both traders, through their lawyers, have denied any wrongdoing.

Their colleague Bruno Iksil, a trader known as the “London Whale” for the outsize bets he made that could roil markets, had his name associated with the embarrassing loss. No charges were laid against him. Prosecutors say he tried to raise questions about how his colleagues were recording the trades.

A Senate subcommittee headed by Sen. Carl Levin, D-Mich., found in an investigation that senior JPMorgan executives made inaccurate statements about the loss that misinformed investors and the public.

Levin said Thursday the SEC could still determine who may have been responsible at higher levels of the bank.

Sen. John McCain of Arizona, the senior Republican on the subcommittee, sent White a letter asking her to hold individuals accountable for their role in the debacle. And Sen. Charles Grassley, R-Iowa, said “Maybe we’ll see more enforcement action (from the SEC) on how the bank communicated with investors.”

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