15 Aug 2013

Traders charged in connection with London fraud

10:58 am on 15 August 2013

The US Department of Justice has charged two JPMorgan Chase traders with fraud relating to trading losses of $US6.2 billion in London.

Javier Martin-Artajo and Julien Grout are accused of keeping false records on the trades and committing wire fraud. The BBC reports both deny the charges.

The complaint, which was unsealed on Wednesday in a federal court in Manhattan, said they were responsible for hiding more than $US660million in losses.

Separately, the US Securities and Exchange Commission filed a civil complaint against the two traders on Wednesday as well.

According to New York southern district US Attorney Preet Bharara, they began to "creatively cook the books" at JP Morgan in March of 2012.

He explicitly singled out a lack of adequate controls at JP Morgan that allowed such a cover-up to take place.

The BBC reports the case has been hugely embarassing for the bank.

London-based derivatives trader Bruno Iksil, who earned the nickname the "London whale" for his big bets on financial derivatives markets, has not been charged.

He is co-operating with the authorities, according a separate agreement dated 20 June, which was also released on Wednesday.