Two former JPMorgan Chase & Co. traders were indicted for engaging in a securities fraud to hide trading losses that eventually surpassed $6.2 billion on wrong-way derivatives bets last year, Bloomberg News reported yesterday. 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 the indictment, unsealed yesterday in federal court in Manhattan. The U.S. announced preliminary charges against the men in August. Both were indicted by a grand jury on five counts, including securities fraud, conspiracy, filing false books and records, wire fraud and making false filings with the U.S. Securities and Exchange Commission. The pair, along with unidentified co-conspirators, are accused of engaging in a scheme to manipulate and inflate the value of position markings in the synthetic credit portfolio, or SCP. They face prison terms of up to 20 years if convicted of securities fraud, the most serious charge.
