U.S. prosecutors said Friday their efforts to extradite from Spain a former JPMorgan Chase & Co executive charged in connection with the bank's $6.2 billion "London Whale" scandal had hit a dead end.
In a filing in Manhattan federal court, prosecutors said Spanish authorities have decided not to appeal an April 23 ruling by a court rejecting the extradition to the United States of Javier Martin-Artajo, a Spanish citizen.
The filing came in a civil lawsuit brought in 2013 by the U.S. Securities and Exchange Commission against Martin-Artajo and another trader, Julien Grout, who were charged criminally at the same time.
The Spanish court's decision effectively has left both men out of U.S. prosecutors' reach. Grout lives in France, which does extradite its own citizens.
With extradition off the table, prosecutors under Manhattan U.S. Attorney Preet Bharara said they no longer are seeking to delay depositions in the SEC's case.
But prosecutors said they would support the SEC's bid for a court order requiring the defendants sit for depositions in New York.
The SEC in its own letter on Thursday said the men, who would likely invoke their Fifth Amendment right against self-incrimination, are not willing to be deposed, and Martin-Artajo's lawyer has said any deposition must be in Europe.
But the SEC said the men "should not be able to dictate whether and where their depositions take place simply because they are fugitives," even if they fear being arrested by coming to New York.
Edward Little, Grout's lawyer, objected in a letter Friday, saying the SEC's request would force his client to allow for a default judgment to be issued in the case.
U.S. District Judge George Daniels has scheduled a hearing for May 8. Martin-Artajo's lawyer declined comment.
Martin-Artajo and Grout were indicted in 2013 on five counts, including securities fraud, wire fraud and conspiracy.
Prosecutors said the duo hid 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.
Both men deny wrongdoing. In 2013, JPMorgan agreed to pay more than $1 billion to settle U.S. and British regulatory probes into the London Whale losses and admitted wrongdoing.
The cases in U.S. District Court, Southern District of New York, are U.S. v. Martin-Artajo, No. 13-cr-00707, and Securities and Exchange Commission v. Martin-Artajo, No. 13-05677.
