U.S. authorities investigating the $6.2 billion "London Whale" trading losses at JPMorgan Chase & Co are considering making arrests, the latest twist in a case that created a scandal for the largest U.S. bank, according to two people familiar with the situation.
The main target of the investigation is Javier Martin-Artajo, according to the sources, who did not want to be identified because the investigation is ongoing. Artajo worked in London as the direct supervisor of Bruno Iksil, the trader who became known as "the London Whale" after making outsized bets in a thinly traded derivatives market.
The U.S. is also looking at Julien Grout, Iksil's junior trader, according to one of the sources. Grout, who stayed on at JPMorgan after Iksil, Martin-Artajo, and another employee were fired from the bank, is the most junior person under investigation by authorities.
The timing of the possible arrests was not clear.
Martin-Artajo's lawyer, Lista Cannon, and Iksil's lawyer, Jonathan Barr, did not immediately respond to requests for comment. Grout's lawyer in Paris did not immediately respond to a request for comment.
A spokesman for JPMorgan Chase, Mark Kornblau, declined to comment.
The investigation is focusing on whether anyone responsible for the trades tried to deliberately mismark them by inflating the value at which they were recorded on JPMorgan's books at the height of the scandal, which took place during the first half of 2012.
Reuters reported on Thursday that Iksil is cooperating with the government and will not face any charges. His cooperation is essential to any arrest, the sources said.