Former JPMorgan Chase & Co. (JPM) trader Javier Martin-Artajo was arrested in Madrid, almost two weeks after U.S. prosecutors charged him with trying to hide trading losses that cost the bank more than $6.2 billion last year.
He turned himself in this morning after being contacted by investigators, a Spanish police official said today. His passport has been confiscated pending extradition proceedings, a spokeswoman for the National Court told reporters today.
"The arrested person is presumed responsible for manipulating and inflating the value of positions in the synthetic credit portfolio of his firm with the aim of achieving specific objectives of daily losses and gains," Spanish police said in a statement today.
The U.S. earlier this month charged Martin-Artajo, a Spanish citizen, and Julien Grout, a French citizen, with trying to hide the losses. Both men face as long as 20 years in prison if convicted of the most serious counts, including conspiracy and wire fraud.
Martin-Artajo, 49, oversaw trading strategy for the synthetic portfolio at JPMorgan's chief investment office in London, while Grout was a trader who worked for him. They are charged with conspiring to falsify securities filings from March to May of 2012. The U.S. sought to keep the charges secret while arrests were attempted before unsealing them on Aug. 14.
Martin-Artajo's lawyer, Lista Cannon, didn't immediately respond to a call seeking comment today. He "is confident that when a complete and fair reconstruction of these complex events is completed, he will be cleared of any wrongdoing," a spokeswoman for his law firm said earlier this month. Jennifer Zuccarelli, a spokeswoman for JPMorgan declined to comment.
JPMorgan Chief Executive Officer Jamie Dimon characterized the loss as "the stupidest and most embarrassing situation I have ever been a part of." First disclosed in May 2012, the bad bets led to an earnings restatement, a U.S. Senate subcommittee hearing and probes by the Securities and Exchange Commission and U.K. Financial Conduct Authority.
Bruno Iksil, the Frenchman at the center of the case who became known as the "London Whale" because his portfolio was so large, signed a non-prosecution agreement with the U.S. in June, the government said. He pledged to cooperate with investigators as part of the deal.
