My client's a government pawn: lawyer for 'Whale' assistant
A lawyer for one of the former JPMorgan Chase traders at the center of the bank's "London Whale" scandal says his client "has been unjustly played as a pawn in the government's attempt to settle its highly politicized case" against the bank.
The statement from Julien Grout's attorney comes one day after a U.S. grand jury indicted the former junior trader and former JPMorgan trader Javier Martin-Artajo, accusing them of hiding hundreds of millions of dollars of losses within JPMorgan's chief investment office in London by marking positions in a credit derivatives portfolio at inflated prices.
Those losses were part of an overall $6.2 billion trading loss suffered by the bank centered on Bruno Iksil, the former trader known as the London Whale. Martin-Artajo supervised Iksil, while Grout worked for Iksil.
According to the indictment, Martin-Artajo and Grout artificially inflated the value of securities from March to May 2012 "to hide the true extent of significant losses" in a trading portfolio.
"Mr. Grout was a junior trading assistant acting under the direct instructions of his managers and has been unjustly played as a pawn in the government's attempt to settle its highly politicized case against JPMorgan Chase," attorney Edward Little said in the statement.
"It is incredible that the 'London Whale' himself, Bruno Iksil, the senior trader who created and ran JPMorgan Chase's CDS portfolio, got a deal from the government allowing him to escape all charges in return for testimony against his own junior trading assistant, Julien Grout," the statement continued.
"It is astonishing that the prosecutors are relying on Iksil's testimony when he is the one who taught Mr. Grout how the bank was marking the portfolio, gave specific instructions on where he should mark positions, and personally approved the marks on a daily basis. Mr. Grout was totally dependent on Iksil's instructions and relied in good faith on his expertise," Little said.
Little said Grout client will be cleared.
"The government's strategy—letting Iksil escape responsibility in exchange for incriminating Mr. Grout—exposes the weakness of the charges and can only be explained by the political pressure put on the Department of Justice to bring a criminal case in the 'London Whale' affair, Little said.
—By CNBC.com with Reuters