Former JP Morgan Employees Reported to Be Charged in “London Whale” Debacle

Jacob Harper |

The US is planning on leveling formal charges against former London-based employees of JPMorgan Chase & Co. (JPM) , alleging their London branch hid $6.2 billion losses from American investors last year. It’s not entirely clear at this time which specific employees will be formally charged, or whether the company will be reprimanded, fined, or both. Acording to the New York Times, the former bankers charged will be former executive Javier Martin-Artajo and former trader Julien Grout.

The usually-conservative investment bank has been hammered hard by the unusually brazen risks their London branch took in 2012, which ended up nearly crippling the bank. The bank is still internally investigating what allowed traders to leverage so heavily that such a trade could even happen. CEO Jamie Dimon has referred to the trades as “egregious mistakes.”



The investigation by the US government specifically accuses the bank of intentionally mismarking trades to make them look like they weren’t losing as much money as they actually were. Dimon himself admitted he didn’t fully understand the scope or the complexity of the London trades until after they happened, raising questions whether the bank had become irreparably reckless in their trading.

This development caps off a nearly year-long investigation into the bank by the federal government concerning the so-called “London Whale” debacle. The Securities and Exchange Commission announced on Aug. 9 that they would seek to have the bank formally admit to culpability as part of the company’s settlement over the London Whale trades. If the bank isn’t allowed to settle without also admitting guilt, as they have in previous settlements, the bank could be potentially opened up to lawsuits from investors.

On July 29, JPMorgan settled for $410 million after the bank was alleged to have engaged in a price fixing scheme involving energy prices. The bank is currently being investigated by eight different federal agencies for various trading violations.

JP Morgan is down .49 percent to hit $54.03 a share. 

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Companies

Symbol Name Price Change % Volume
JPM JP Morgan Chase 91.13 0.07 0.08 11,066,952
HYDN Hayden Hall Inc (De) 0.00 0.00 0.00 0

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