Ex-JPMorgan Chase trader held over ‘London Whale’ scandal

Spanish police arrested former JPMorgan Chase trader Javier Martin-Artajo yesterday as he prepares to fight possible extradition to the United States over a US$6.2 billion financial scandal at the United States' largest bank.

The arrest came after the US charged Spaniard Martin-Artajo and a junior colleague, Frenchman Julien Grout, with wire fraud and conspiracy to falsify books and records related to the trading losses, which were executed by Bruno Iksil.

Iksil, who was nicknamed the "London Whale" for his large bets on derivatives markets, is co-operating with US prosecutors and has not been charged.

Martin-Artajo was released on condition he stays in Spain and checks in regularly with a court. A judicial source said yesterday he had told a Spanish court he is unwilling to be sent to the United States to face the charges.

Martin-Artajo, who handed himself in at a Madrid police station after being contacted by police, is accused of trying to inflate the value of trading positions held on his group's books. The mismarking allegedly took place as the traders tried to hide mounting losses in an illiquid derivatives market, where they had made outsized bets.

Martin-Artajo was Iksil's supervisor at JPMorgan's Chief Investment Office in London.