The US Securities and Exchange Commission (SEC) has dropped its case against two former JPMorgan traders. The case alleged that they conspired with other executives to hide the trading scandal that lost the bank $6.2 billion.
The decision to dismiss the civil claims against Javier Martin-Artajo and Julien Grout wraps up a five-year investigation by the US Department of Justice, which last month abandoned its criminal charges against both men.
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The authorities decided not to pursue the charges after it determined that it can no longer rely on the testimony of the former JP Morgan trader Bruno Iksil, who was nicknamed ‘the London Whale’.
In April and May 2012, huge trading losses occurred at the bank’s CIO unit, based on transactions booked through the City branch. Iksil’s role of buying positions for an enormous trading book at JP Morgan earned him the aforementioned nickname among hedge funds and investors.
Mr. Iksil and two of his bosses were fired after the CIO suffered losses following their bets on corporate credit derivatives. Top executives were also rattled, including CEO Jamie Dimon and the Chief Investment Officer Ina Drew, who has since stepped down. The lender has already paid more than $1 billion in settlements for this case to US and UK regulators.