Two ex-JPMorgan Chase employees are facing arrest in the so-called "London Whale" scandal, which cost the massive bank about $8.2 billion last year.
The employees, Javier Martin-Artajo and Julien Grout, will reportedly be arrested in London. While the two could face charges, the actual London Whale, Bruno Iksil, will likely not face charges.
Grout is Iksil's junior trader, while Martin-Artajo is the main target of the investigation, reports Reuters. The latter was the direct supervisor of Iksil.
The London Whale scandal significantly tarnished the reputation of the United States' largest bank. It has also led to calls for greater oversight of Jamie Dimon, the bank's chief executive.
But while Iksil is essentially to blame for the scandal, his cooperation with the government is key to prosecuting other players in the scandal. Because of this, Iksil will likely never be charged.
JPMorgan was forced to unwind derivatives positions Iskil had when the scandal came to light in April 2012. The unwinding led to massive losses, which in turn highlighted the scale of the bank's risk-taking activities.
but The Huffington Post notes that the bank is close to a settlement with the US Securities and Exchange Commission regarding the scandal. The settlement reportedly will include JPMorgan admitting fault, a rarity on Wall Street.
After the scandal, critics claimed the big bank should not have been allowed to engage in risky behavior, like that in the London Whale scandal, as long as it was engaging in commercial banking. About a dozen employees changed jobs after the scandal, while several others completely left the firm.
JPMorgan's board also cut Dimon's bonus and a shareholder movement started to strip the executive from his dual role as chairman of the board. The movement ultimately failed.
While civil investigations continue into the scandal, a criminal investigation set out to determine if anyone responsible for the trades purposefully lied about the losses by inflating the value at which they were recorded on the books. Grout was reportedly responsible for recording the price of positions on the team's trading book.
It is unclear when the reported arrests of two former JPMorgan Chase employees are supposed to happen.