Two former JPMorgan Chase & Co traders were indicted for allegedly engaging in a scheme to hide trading losses that eventually surpassed US$6.2 billion on wrong-way derivatives bets last year.
Javier Martin-Artajo, who oversaw trading strategy for the synthetic portfolio at the bank’s chief investment office in London, and Julien Grout, a trader who worked for him, were named in a federal indictment, which was unsealed on Monday in federal court in Manhattan. The US first announced charges against the men last month.
Both were charged in Monday’s indictment with five criminal counts, including conspiracy, securities fraud, filing false books and records, wire fraud and making false filings with the US Securities and Exchange Commission (SEC). The pair, along with unnamed co-conspirators, are accused of engaging in a scheme to manipulate and inflate the value of position markings in the synthetic credit portfolio (SCP).
The two “manipulated and inflated the value of position markings in the Synthetic Credit Portfolio to achieve specific daily and month-end profit and loss objectives,” the US alleged in the indictment. “In other words, they artificially increased the marked value of securities in order to hide the true extent of significant losses in that trading portfolio.”
JPMorgan has agreed to pay at least US$750 million to resolve US and UK regulatory probes of its record trading loss, people with knowledge of the negotiations said. The bank is seeking to settle as many inquiries as possible before the third quarter ends on Sept. 30, the people said, asking not to be identified because the talks are private.
Ed Little, a lawyer for Grout, and Meeta Vadher, a spokeswoman for Martin-Artajo’s lawyers, did not immediately return e-mails on Monday after regular business hours seeking comment on the indictment.
New York-based JPMorgan spokesman Joe Evangelisti declined to comment on the charges against the two men.
Martin-Artajo and Grout were named in criminal complaints filed by prosecutors in the office of Manhattan US Attorney Preet Bharara on Aug. 14 that charged them with four separate counts of conspiracy, falsifying books and records, wire fraud, false filings with the SEC. Monday’s indictment adds the securities fraud charge, which carries a maximum term of 20 years in prison.
The US said that at its most profitable point in 2009, the SCP produced more than US$1 billion in revenue for JPMorgan.
Bruno Iksil, the Frenchman at the center of the case, who became known as the London Whale because his portfolio was so large, was not named in Monday’s filing. He signed a non- prosecution agreement with the US in June, Bharara said last month. Iksil has pledged to cooperate with prosecutors as part of the deal with the US.
Martin-Artajo “engaged and directed” the scheme to enhance his apparent job performance and position at JPMorgan and eligibility for promotion and bonuses, and to “forestall a possible plan by the bank to move the synthetic credit portfolio to JPMorgan’s investment bank,” prosecutors said.
Grout was accused of participating with Martin-Artajo in the conspiracy to “curry favor with his supervisor and to enhance his apparent job performance,” the indictment said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts