A former JPMorgan banker charged with concealing massive losses related to the bank's 'London Whale' trade has been arrested in Spain.
Spanish police said Javier Martin-Artajo, former head of credit and equity trading at JPMorgan's chief investment office, turned himself in.
His case has been handed over to the National Court, which deals with serious international crimes.
U.S. prosecutors charged Artajo and his colleague Julien Grout earlier this month with conspiring to conceal more than $500 million in losses related to the bank's complex derivatives bet that turned sour. The series of trades ultimately generated losses of more than $6 billion U.S. for JPMorgan
Bruno Iksil, another trader on the team, escaped prosecution after agreeing to provide U.S. authorities with evidence about the trades, and to testify at any trial.
The criminal charges were the first to be filed in connection with the losses. They include wire fraud, falsifying books, records and Securities and Exchange Commission filings, and conspiracy.
When losses began to mount in March 2012, Martin-Artajo allegedly instructed Grout to hide how deep they were from JPMorgan management, ultimately resulting in the bank overstating first-quarter earnings by several hundred million dollars, prosecutors say.
The losses from the London trades, which drew on federally insured deposits, stoked new concerns about the stability of big banks.
A report on the botched trade issued in March by a Senate committee said JPMorgan had "disregarded multiple internal indicators of increasing risk; manipulated models; dodged [federal] oversight; and misinformed investors, regulators, and the public about the nature of its risky derivatives trading."
