JPMorgan’s former 'London Whale' supervisor arrested in Spain

Spanish police arrested former JP Morgan Chase trader Javier Martin-Artajo on Tuesday as he prepares to fight possible extradition to the United States over a US$6.2 billion financial scandal at America’s largest bank.

The arrest came after the United States 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 cooperating with US prosecutors and has not been charged.

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

Martin-Artajo, who turned 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 JP Morgan’s Chief Investment Office in London.