Two former JPMorgan Chase employees are expected to be arrested for their role in the so-called "London Whale" scandal that lost the bank roughly $6.2 billion last year, The New York Times reports. The arrest of the employees, Javier Martin-Artajo and Julien Grout, will reportedly take place in London.
Not among those expected to be charged is the London Whale himself, one Bruno Iksil, who built up the massive positions in the derivatives market that eventually cost the bank billions, according to a Reuters report published Thursday. According to a later report, Iksil will have to play a key role in any arrests related to the scandal.
On Thursday, Reuters reported that JPMorgan, the largest bank in the country by assets, was close to a settlement with the Securities and Exchange Commission over the scandal in which the bank would admit fault, a relative rarity on Wall Street.
The Federal Bureau of Investigation and federal prosecutors are separately investigating whether company employees underrepresented the scandal's potential fallout to investors in a 2012 meeting, according to a separate New York Times report.
The company's chief executive officer, Jamie Dimon, early on described the scandal as a "tempest in a teapot," an opinion he later described as "dead wrong," according to the Wall Street Journal. But Dimon has maintained that he did not purposefully deceive anyone with his initial comments. "There was no hiding, there was no lying, there was no bullshitting, period," he said of the scandal In June.
The New York Times first reported the news of the potential arrests:
Breaking News: Authorities Plan to Arrest 2 Former JPMorgan Employees http://t.co/ENVYMe7EtS— The New York Times (@nytimes) August 9, 2013
This is a developing story.
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In what is now considered to be one of the biggest and most famous Ponzi schemes in history, Madoff laundered about $65 billion, <a href="http://www.forbes.com/2009/03/13/bernie-madoff-fraud-personal-finance-financial-advisor-network-ponzi-scheme.html">Forbes reports</a>. Madoff defrauded thousands of investors, all of whom can be found on a <a href="http://www.huffingtonpost.com/2009/02/04/madoff-victims-list-relea_n_164097.html">163-page list</a>.
Ex-Goldman Rajat <a href="http://www.huffingtonpost.com/2012/10/24/rajat-gupta-sentenced-insider-trading_n_2010861.html?utm_hp_ref=business" target="_hplink">Gupta was sentenced to two years</a> in prison for participating in one of the largest insider trading schemes in history.
Kerviel was found guilty of one of the world's most colosal trading frauds in 2010. He cost France's Société Générale bank 4.9 billion Euros. He was sentenced to 3 years in jail and was also sentenced to paying a $7 billion fine, <a href="http://www.guardian.co.uk/business/2012/oct/24/french-rogue-trader-loses-appeal?newsfeed=true">The Guardian reports</a>.
Steven Goldberg, Peter Grimm and Dominick Carollo
Goldberg, Grimm and Carollo were found guilty of conning the I.R.S. and cities in a "bid-rigging scheme" during their time at General Electric, <a href="http://www.businessweek.com/news/2012-05-11/ex-ge-bankers-convicted-of-municipal-bond-bid-rig-scheme">Businessweek reports</a>. Goldberg was sentenced to four years in prison. Grimm and Carollo were each sentenced to three years.
Raj Rajaratnam, the former head of Galleon Management, was sentenced to 11 years in jail in October 2011, the longest prison term for insider trading to date,<a href="http://www.washingtonpost.com/business/economy/hedge-fund-billionaire-gets-11-year-sentence-in-fraud-case/2011/10/13/gIQAa0PZhL_story.html"> The Washington Post reports</a>.
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Currently serving 110 years in prison, Allen Stanford was, at one time, one of the richest men in America, <a href="http://www.cnbc.com/id/49276842/Allen_Stanford_Descent_from_Billionaire_to_Inmate_35017_183">according to CNBC</a>. He conned about 20,000 investors out of their money in a Ponzi scheme.
Garth Peterson, the former head of Morgan Stanley's Chinese real-estate investments unit, was sentenced to 9 months in jail last August for bribery, <a href="http://online.wsj.com/article/SB10000872396390444508504577593950506343444.html">according to The Wall Street Journal</a>.
Bradley Birkenfeld spent more than 2 years in jail for assisting in income tax evasion while working at UBS. He then volunteered inside information on Swiss banking to the I.R.S., and was rewarded with $104 million for being a whistle-blower, <a href="http://www.nytimes.com/2012/09/12/business/whistle-blower-awarded-104-million-by-irs.html?_r=0">according to The New York Times</a>.
Don Of Thieves
Dennis Levine, Martin Siegel, Ivan Boesky and Michael Milken defrauded Wall Street investors in the 1980's. In a scandalous series of events, Levine stole confidential documents from Lazard Freres investment bank, and the crew made use of inside information, according to <a href="http://www.thedailybeast.com/newsweek/1991/10/13/wall-street-a-greed-apart.html">The Daily Beast</a>.