NEW YORK ( TheStreet) -- The Department of Justice on Wednesday filed criminal charges against two JPMorgan Chase (JPM) employees for alleged crimes connected with the bank's infamous "London Whale" hedge trading losses in 2012.
Charges against JPMorgan employees Javier Martin-Artajo and Julien Grout included wire fraud, falsification of records and falsification of filings with the Securities and Exchange Commission.
Martin-Artajo was the head of trading strategy within JPMorgan's Chief Investment Office in London. Grout was employed as a trader in London. JPMorgan CEO James Dimon in May 2012 first disclosed the company's hedge trading difficulties and the company ultimately lost at least $6.2 billion while unwinding the trading positions.
JPMorgan Chase continues to operate under a regulatory consent order, agreeing to improve its "risk management, model governance, and other control functions."According to various reports, Bruno Iskil, the former JPMorgan trader who was termed the "London Whale" will not be charged by the Justice Department, in return for his cooperation. According to the Justice Department's complaint, JPMorgan Chase's first-quarter 2012 earnings release was in part based on "false and fraudulent information" provided by Martin-Artajo and another unnamed JPMorgan employee. JPMorgan Chase on July 13 of last year restated its first-quarter 2012 results to show net income of $4.924 billion, declining from the previously reported from $5.383 billion. The company on the same day said it has taken $4.4 billion in pretax second-quarter 2012 losses from the CIO trading problems. Martin-Artajo is being represented by Norton Rose Fulbright in London. The firm in a statement on Tuesday said their client was on "a long-planned vacation," and was "confident that when a complete and fair reconstruction of these complex events is completed, he will be cleared of any wrongdoing." -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn
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