A lawyer for a former JPMorgan Chase & Co employee who worked with "the London Whale" Bruno Iksil has been trying to convince U.S. prosecutors to drop criminal charges against his client, Julien Grout, a source familiar with the matter said on Friday.
On Aug. 14, prosecutors accused Grout, who was Iksil's deputy in the bank's Chief Investment Office in London, of trying to hide hundreds of millions of dollars in trading losses by marking positions in a credit derivatives portfolio at falsely inflated prices.
In a meeting with prosecutors late last month, Grout's lawyer Edward Little argued Grout did not know the prices were wrong, the source said. Instead, based on the instructions he was given by superiors, including Iksil, Grout recorded prices he thought were correct.
In response, the source said, prosecutors offered Grout the chance to talk to them directly and tell them whatever he knew without the risk of further incrimination. He declined, the source said.
The U.S.government still has the option not to pursue the charges against Grout. But if a grand jury votes to indict him, the opportunity for the charges to be dismissed will vanish. Prosecutors are expected within the next month to seek indictments against Grout and his former boss, Javier Martin-Artajo, who was also charged.