Traders from JPMorgan’s London office hid the extent of their losses resulting from the large bet that spun out of control in 2012. This was according to federal authorities who filed charges against the two former London traders for the bank. The case put the spotlight on the company’s executives in New York, where the pressure for profits as well as lax controls aggravated the problem.

Federal officials indicated how JPMorgan lacked oversight in the two criminal complaints they filed against Julien Grout, a low-level trader, and Javier Martin-Artajo, manager who supervised the trading strategy. The two were accused of manipulating the records to hide millions of dollars in losses. They operated for months with little supervision and the impression that executives supported them.

Martin-Artajo maintained that the order came from New York when he asked Grout to record losses only in extreme instances. Bank insiders disputed the claim and argued that Martin-Artajo took steps to hide his actions from the higher-ups. According to the complaint, Grout was asked by another bank employee about the valuations and he answered, “Ask management.”

According to the Federal officials, the manipulations continued even if some of the traders were already alarmed by the situation. Complaints indicated that one instance Grout recorded a modest loss of around $10 million, which was just a fraction of the true amount.

Federal officials blamed not just the two traders but also JPMorgan and its top managers including Jamie Dimon, who was the chief executive who has dismissed concerns about the trades as a tempest in a teapot. He later acknowledged he was wrong.

JPMorgan declined to comment Wednesday. The bank stated it has improved its internal controls, spotted the suspicious actions of the traders, and reported them to the proper authorities. But the complaints against the traders have impacted the reputation of the bank, which is the largest in the US.

About The Author

Abby is fun loving yet serious professional, born and raised in Sioux Falls, SD. She has a great passion for journalism, her family includes her husband, two kids, two dogs and herself. She has pursued her Mass Communication graduation degree from the Augustana College. She is currently employed at TheWestsideStory.net, an online news media company located in Sioux Falls, SD.

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