The Southern District U.S. Attorney's Office has moved to drop charges against two former JPMorgan Chase & Co. traders in the "London Whale" over concerns about testimony from the whale himself, Bruno Iksil.
Acting U.S. Attorney Joon Kim's decision was based on a review of "recent statements and writings made by Iksil," whom prosecutors planned to use as a witness.
In May, reports surfaced that Iksil, who resides in France, wrote a manifesto contradicting the government's case against Javier Martin-Artajo and Julien Grout, according to Grout's U.S.-based attorney, Hughes Hubbard & Reed partner Edward Little.
Additionally, prosecutors said extraditing the defendants had proved problematic. In 2015, a Spanish court rejected a request to extradite Martin-Artajo. Similarly, prior attempts to extradite Grout had proved "futile," the U.S. Attorney's Office said.
"The government no longer believes that it can rely on the testimony of Iksil in prosecuting this case, even if the defendants appeared," Kim said in a statement July 21.
Martin-Artajo and Grout were indicted in the United States in 2013 for allegedly conspiring with Iksil to hide hundreds of millions in losses in a credit derivatives trading portfolio when the trio worked as traders for JPMorgan.
Reached by phone July 21, Little thanked the U.S. Attorney's Office for "their decency and professionalism."
"We are absolutely thrilled that after four years of very tough litigation that [Kim's] office has done the right thing by agreeing to dismiss the case," he said.
An attorney for Martin-Artajo's team at Norton Rose Fulbright could not be reached for comment, nor could an attorney for Iksil's team at Baker & Hostetler.
The motion to dismiss is subject to the approval of Southern District Judge Lorna Schofield.
The U.S. Securities and Exchange Commission has a parallel civil case against both defendants pending in the Southern District.