Two former London bankers have been charged in connection with massive losses racked up by JPMorgan last year.
LONDON (CNNMoney)
Javier Martin-Artajo and Julien Grout worked for the London arm of JPMorgan (JPMPRD)'s chief investment office. Martin-Artajo was head of Europe and Grout was a trader on the team that made the complex credit derivatives bet that ultimately generated losses of more than $6 billion.
The criminal charges are the first to be filed in connection with the losses, and include wire fraud and conspiracy to commit wire fraud, falsify books, records and SEC filings.
In a statement issued via law firm Norton Rose Fulbright, Martin-Artajo said he was confident he would be cleared of any wrongdoing. Grout's lawyer could not be immediately reached for comment.
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The losses on the London trades, which drew on federally-insured deposits, stoked new concerns about the stability of big banks. JPMorgan has previously said it has recordings, emails and other documents that suggest traders may have been hiding the losses as they began to balloon.
A report on the botched trade issued in March by the Senate's Permanent Subcommittee on Investigations 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."
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Regulators at the Federal Reserve and the Office of the Comptroller of the Currency ordered JPMorgan in January to improve its risk management and internal auditing in light of the losses. The bank did not face any monetary penalty at that time, consenting to the order without admitting or denying wrongdoing.
Ina Drew, the former head of the CIO, earlier this year placed much of the blame for the massive loss on London traders, who she said inflated the value of their positions and failed to calculate losses accurately. She defended her role, saying she did not engage in any misconduct. 
First Published: August 14, 2013: 10:28 AM ET
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