The lead prosecutor on pending criminal cases against two former JPMorgan Chase & Co traders involved in the "London Whale" scandal is leaving Manhattan U.S. Attorney Preet Bharara's office to join a prominent defense firm, according to a statement from the firm viewed by Reuters in advance of its public release.
Eugene Ingoglia will become a partner at Morvillo Law on Thursday. His fraud cases against Javier Martin-Artajo and Julien Grout, two former London-based JPMorgan employees who allegedly tried to cover up trading positions that eventually cost the bank $6.2 billion, have both been slowed by extradition proceedings against Martin-Artajo, who is in Spain. Grout, who is living in France, is not subject to extradition and has so far not come to New York voluntarily.
A spokeswoman for Bharara declined to comment on Ingoglia's departure or to say who in the office will take over the lead position on the "London Whale" cases.
The move represents another chip away at the seasoned group of Manhattan prosecutors who over the past five years have brought charges against high-profile people in the financial world. His departure follows moves to the private sector by Antonia Apps, who won an insider trading conviction for former SAC employee Michael Steinberg, and Reed Brodsky, who took the lead on insider trading cases against Galleon Group founder Raj Rajaratnam and former McKinsey Chief Executive Officer Rajat Gupta.
Ingoglia also was also first chair on the case against Mathew Martoma, a former employee of Steven A. Cohen's hedge fund SAC Capital Advisors, is now serving a nine-year prison sentence after a jury convicted him in the largest-ever insider trading case based on illegal trades he made in two drug stocks in the summer of 2008.
He is heading to a firm that has played a large role in Wall Street's Bharara's push to aggressively pursue insider trading cases.
A partner there, Gregory Morvillo, is representing Anthony Chiasson, who along with another hedge fund manager, Todd Newman, was convicted of charges related to insider trading in 2012. Newman and Chiasson's appeal is being closely watched, because some judges on the 2nd U.S. Circuit Court of Appeals during oral arguments appeared sympathetic to its interpretation of the law. It argued the government should have been required to prove they knew the insider who originally disclosed non-public information received a benefit for the alleged tip. [ID:nL2N0NE0OR]
"Gene Ingoglia has been an outstanding federal prosecutor, successfully handing some of the highest profile white collar criminal cases," Brodsky said. "His departure is a loss for the U.S. Attorney's Office and a gain to private practice, and he will be missed."
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