Ex-JPMorgan Traders Aren’t Fugitives, Lawyers Tell JudgePatricia Hurtado
Former JPMorgan Chase & Co. traders Javier Martin-Artajo and Julien Grout aren’t evading authorities in the U.S., where they face charges of engaging in securities fraud to hide losses, their lawyers told a judge in Manhattan.
The men, who are accused of hiding losses that eventually surpassed $6.2 billion on wrong-way derivatives bets, haven’t appeared to answer the charges because they live outside the U.S., the lawyers said.
The attorneys objected to a statement by Joseph Boryshansky, a lawyer for the U.S. Securities and Exchange Commission, who told U.S. District Judge George Daniels at a hearing today that Martin-Artajo and Grout were “fugitives” from the U.S.
“Mr. Martin-Artajo is not a fugitive. He’s a Spanish citizen who did not flee,” his lawyer, William Leone, told Daniels. “For Mr. Boryshansky to get up and assert Mr. Martin-Artajo is a fugitive from justice is completely out of line.”
Marc Weinstein, a lawyer for Grout, also said his client hadn’t fled the U.K. to evade extradition to the U.S.
“He was fired, so he could not attempt to live and be unemployed in England,” Weinstein said. “He, his wife and two small children moved back to France. He is a citizen of France.”
Martin-Artajo, who now lives in Spain, oversaw trading strategy for the synthetic portfolio at the bank’s chief investment office in London. Grout was a trader who worked for him.
Both men were named in an indictment filed by prosecutors in the office of Manhattan U.S. Attorney Preet Bharara in September. The SEC alleged in a parallel suit that the two men engaged in a scheme to enhance the portfolio’s apparent performance and thereby curry favor with their supervisors. Daniels is presiding over the SEC case.
Boryshansky said federal prosecutors probably would seek to delay proceedings in the parallel SEC suit so the criminal case can proceed first.
Jennifer Queliz, a spokeswoman for Bharara’s office, and Peter Donald, a spokesman for the New York office of the Federal Bureau of Investigation, declined to comment about the status of pending extradition proceedings for both men.
At a conference in Manhattan in October, Lorin Reisner, head of the criminal division of Bharara’s office, said that federal authorities expect that Martin-Artajo would eventually be extradited to the U.S. He called Grout’s case a “more complicated” matter.
Daniels said today he would wait for a formal request from prosecutors for a delay in the SEC case. He scheduled the next hearing for May 14.
The cases are SEC v. Martin-Artajo, 13-cv-5677, and U.S. v. Martin-Artajo, 13-cr-00707, U.S. District Court, Southern District of New York (Manhattan).