JP Morgan is near a final settlement of probes into its London Whale derivatives loss and expects to pay about $700 million, according to source familiar with the matter. Completion of the deal depends on coordinating agreements with multiple government agencies, the source said. [Reuters]
Former JP Morgan trader Javier Martin-Artajo was released after telling a Madrid court he opposed attempts by U.S. prosecutors to extradite him on charges he hid trading losses that cost the bank $6.2 billion. The former trader turned himself in this morning after being contacted by investigators, a Spanish police official said. He was released after a hearing in Madrid today in which he said he was unwilling to be extradited, according to a spokeswoman for the National Court. The U.S. this month charged Martin-Artajo, a Spanish citizen, and Julien Grout, a French citizen, with trying to hide the losses stemming from trades by Bruno Iksil, the Frenchman at the center of the case who became known as the “London Whale.” Grout and Martin-Artajo face as long as 20 years in prison if convicted of the most serious counts, including conspiracy and wire fraud…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. [Bloomberg, Earlier: If There’s Some Reason Indicted JP Morgan Employee Should Cut Vacation Short, Fly To U.S., He Hasn’t Heard It]
“Well That’s My Cue To Leave” Says Guy Who Handles “All Litigation And Government Investigations Affecting JP Morgan Around The World” After 957th Probe Into Bank’s AffairsBy Bess Levin
Michael Coyne is gonna take off now. Read more »
Bloomberg Investigation Concludes Drawing Parallels Between JPMorgan, Nazis Might’ve Been A Tad MuchBy Jon Shazar
From here on, the news organization will frown upon comparing the destruction of world-historic landmarks during wartime to unfavorable interest-rate swap settlements forced by JPMorgan Chase. Read more »
Half of today’s financial news stories are about how some government enforcement agency is looking into something you already knew about. This is very boring for me! Remember when Goldman lost a bunch of money by fat-fingering some options trades?1 That still happened. Remember how JPMorgan did some naughty things with California electricity markets? Those historical circumstances continue to obtain. Remember the Whale? Still a thing.
You could wonder about the substance of some of these investigations. JPMorgan’s electric boogaloo, while intensely naughty, also seems pretty clearly to have followed FERC/ISO rules to the letter, so it’s hard to imagine charging anyone with a crime, as the FBI is apparently contemplating.2 And while I don’t know much about the SEC rules re: electronic options trading, the actual thing that Goldman did was sell options really cheaply, and it would be pretty weird if there were a rule against that, so I don’t know where the SEC is going with its enforcement investigation.3 (The Whale, I’ll give you, that stuff seems bad.) But basically, yeah, sure: bad things happened, rules might have been violated, market safeguards were shown to be less robust than had previously been thought, it is altogether fitting and proper that someone look into it. Or a lot of someones I guess.
Still the stories carry a whiff of looking for the keys under the lamppost: Read more »