Charges Against 2 Traders Fault JPMorgan for Lack of Oversight - NYTimes.com

Charges Against 2 Traders Fault JPMorgan for Lack of Oversight - NYTimes.com:

"More than three thousand miles from the Park Avenue headquarters of JPMorgan Chase, traders in an office building nestled near the Thames River disguised the extent of their losses as a huge bet spun out of control last year, federal authorities say."

"Federal authorities outlined the breakdown in the bank’s oversight in the two criminal complaints against the employees: Javier Martin-Artajo, a manager who oversaw the trading strategy, and Julien Grout, a low-level trader in London. The employees, accused of manipulating the books to disguise hundreds of millions of dollars in losses, operated for months with scant supervision and the impression that higher-ups of the bank supported them."

"The charges on Wednesday stem from a bet the traders built over years. Deploying derivatives — complex financial tools with values linked to an asset like a corporate bond — the traders made bets on the health of large corporations like American Airlines."

"Lawyers for Mr. Martin-Artajo and Mr. Grout will argue that traders have leeway to value their derivatives bets because the actual prices might not be immediately available. Valuing the trades in the murky derivatives world, the lawyers will argue, is often guesswork."

'via Blog this'