MANHATTAN (CN) - Blaming a cooperating witness for sinking the case, federal prosecutors dropped all charges against two former JPMorgan Chase executives accused of trying to hide more than $500 million tied to the "London Whale" trading scandal.
Nearly four years have passed since prosecutors indicted Spanish citizen Javier Martin-Artajo and French national Julien Grout on allegations that they mismarked investments in a multibillion-dollar portfolio they managed, known as the Synthetic Credit Portfolio.
Martin-Artajo and Grout have been successful at avoiding extradition since that time.
A Spanish court rejected the government's attempts to extradite Martin-Artajo in April 2015. Prosecutors determined earlier that trying to extradite Grout would have been futile.
Meanwhile, prosecutors also have had trouble with their star witness Burno Iksil, a JPMorgan trader whose bets caused more than $6.2 billion in losses in 2012.
His colossal portfolio is what earned him the name the "London Whale."
"Based on a review of recent statements and writings made by Iksil, however, the government no longer believes that it can rely on the testimony of Iksil in prosecuting this case," Assistant U.S. Attorney Michael Ferrara wrote in a three-page memo on Friday. "Based on these developments, among other things, the government has decided to dismiss the charges pending against the defendants."
Acting U.S. Attorney Joon Kim requested the dismissal of Martin-Artajo and Grout's charges, which must still be approved by U.S. District Judge Lorna Schofield.
U.S. District Judge Lorna Schofield must still approve the dismissal.
JPMorgan did not immediately respond to an emailed request for comment.