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People walk past the JP Morgan Chase Building on Park Avenue in New York on May 15, 2012/AFP

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Wanted JP Morgan trader arrested in Spain

People walk past the JP Morgan Chase Building on Park Avenue in New York on May 15, 2012/AFP

People walk past the JP Morgan Chase Building on Park Avenue in New York on May 15, 2012/AFP

MADRID August 27- Spanish police arrested on Tuesday a former JP Morgan trader wanted by the United States on criminal charges in the massive “London Whale” fraud case.

Officers arrested Spanish national Javier Martin Artajo Rueda on an international detention request issued by the United States for alleged fraud and tax crimes, police said in a statement.

After locating Martin Artajo, Spanish police spoke to him and managed to get him to appear at a police station where he was arrested on Tuesday morning, police said, without giving further details.

“The detainee is suspected of being responsible for manipulating and inflating the value of positions on his firm’s credit portfolio,” the police statement said.

The suspect was taken to appear before an investigating judge in Madrid’s National Court.

Martin Atajo is accused of being a senior figure in the 2012 “London Whale” trading scandal involving $6.2 billion in trading losses at US banking giant JP Morgan.

US federal prosecutors filed criminal charges on August 14 against Martin Artajo and Frenchman Julien Grout, alleging the two men kept false records on the trades, committed wire fraud and submitted false US securities filings.

The charges were the first criminal case to stem from last year’s mammoth trading loss. The Securities and Exchange Commission also filed parallel civil charges against the two men alleging securities fraud.

A third ex JPMorgan official involved in the trades, French national Bruno Iksil originally identified as the “London Whale” responsible for the trades was cleared of criminal responsibility after cooperating with prosecutors.

Martin Artajo, 49, is a Spaniard who usually resides in London, while Grout, 35, resides in his native France.

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According to US prosecutors, Martin Artajo was the most senior of the three employees.

The US complaint documents how the London team allegedly falsified financial records after Martin Artajo was pressured from higher ups about losses in early 2012.

Martin Artajo directed underlings to discount the losses and count positions in ways that departed from company practice of pricing assets at mid market levels, according to the complaint.

It cites phone calls and emails from the Iksil, who is identified only as a “co-conspirator not named as a defendant.”

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