Javier Martin-Artajo, a former JPMorgan Chase & Co (NYSE:JPM) trader involved in the London Whale fiasco was arrested in Madrid Tuesday morning, Spanish police said. U.S. prosecutors charged Martin-Artajo two weeks ago with hiding trading losses that cost JPMorgan Chase & Co (NYSE:JPM) more than $6.2 billion.


JPMorgan traders made false SEC filings

Javier Martin-Artajo, a Spanish citizen, handed himself ove to Madrid police after investigators contacted him, reports Charles Penty of Bloomberg. Spanish police said in a statement that his passport has been seized. Martin-Artajo is accused of inflating and manipulating the values in the synthetic credit portfolio (SCP).

Earlier this month, U.S. prosecutors charged Javier Martin-Artajo and Julien Grout of France for hiding the losses. They have been charged on four counts including making false SEC filings, wire fraud and conspiring to falsify books. If convicted, both of them would face up to 20 years prison term.

Javier Martin-Artajo managed JPMorgan Chase & Co (NYSE:JPM)’s synthetic portfolio trading strategy at its chief investment office in London. And Julien Grout worked under him as a trader. The U.S. prosecutors wanted to maintain the secrecy of charges until arrests were made, but they unsealed them on August 14.

Meanwhile, the Securities and Exchange Commission filed a lawsuit in Manhattan. The regulator said that defendants tried to enhance the apparent performance of the synthetic credit portfolio (SCP) to gain favor from supervisors, thus increasing chances of promotion and bonuses.

A blemish on JPMorgan CEO

The London Whale fiasco first came into spotlight in May 2012. Since then, there have been probes by the SEC and the U.K. Financial Conduct Authority, a U.S. Senate subcommittee hearing and earnings restatement. JPMorgan Chase & Co (NYSE:JPM) CEO Jamie Dimon called the London Whale fiasco the “stupidest and most embarrassing situation I have ever been a part of.”

Bruno Iksil, the protagonist in London Whale case who executed the trades, was granted immunity in June after signing a non-prosecution agreement. Under the agreement, Bruno Iksil has pledged to cooperate in the investigation.

JPMorgan Chase & Co (NYSE:JPM) shares were down 1.53% to $51.01 in early trading.