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Former JPMorgan Chase employees may be arrested in coverup

Government authorities are planning to arrest two former JPMorgan Chase employees suspected of masking the size of a multibillion-dollar trading loss, a dramatic turn in a case that tarnished the reputation of the nation's biggest bank.

The arrests are expected to take place in London in the coming days, according to people briefed on the matter who asked not to be identified by the New York Times.

The employees — Javier Martin-Artajo, a manager who oversaw the trading strategy from London, and Julien Grout, a low-level trader responsible for recording the value of the soured bets — could ultimately be extradited under an agreement with British authorities.

The losses at the heart of the case stemmed from outsize wagers made by the traders at JPMorgan's chief investment office in London. The losses, which JPMorgan initially disclosed last May, have since reached more than $6 billion.

After more than a year of gathering evidence about the bet, federal prosecutors and the FBI in Manhattan have concluded that the two employees lowballed losses as the trades spiraled out of control.

While authorities are not pursuing charges against JPMorgan's top executives, according to the people briefed on the matter, the bank is nonetheless bracing for civil charges from regulators. In an unusually aggressive move, the SEC is seeking to extract an admission of wrongdoing from the bank.

Former JPMorgan Chase employees may be arrested in coverup 08/09/13 [Last modified: Friday, August 9, 2013 8:58pm]
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