SARRAZAC – Hundreds of miles from the bustling trading rooms where he worked with the "London Whale", a former JPMorgan trader has taken refuge in a French hamlet where few have heard of the $6.2 billion scandal to which he is being linked.
U.S. authorities on Wednesday filed charges against Julien Grout for crimes related to the scandal, including wire fraud, conspiracy and the falsifying of books and records.
But in sun-drenched Sarrazac, a village of two dozen stone houses built around a medieval church in southern France, the affair had barely registered before this week.
In his parents' picturesque holiday home, with slate roof, mown grass and an old Citroen car outside, former JPMorgan Chase & Co junior trader Grout is keeping a low profile and settling in with his wife and two daughters.
French national Grout was indicted along with Javier Martin-Artajo, who worked in London as the direct supervisor of Bruno Iksil, the trader who became known as "the London Whale" in the JPMorgan scandal in which bad derivatives bets ended up costing the largest U.S. bank more than $6.2 billion.
A U.S. senate report said that Grout, who reported to Iksil and was in charge of recording the prices of positions on the trading book, warned his superior in a recorded phone conversation in March 2012 that the team's reporting strategy would be "a big fiasco" and end up in "big drama".
Grout is the lowest-ranked person targeted so far in the investigation, but several sources familiar with the prosecutors' thinking say that they are trying to build an unbroken chain from the bottom up to Martin-Artajo.
"He has just arrived, he seems to be a very nice guy," said Sarrazac mayor Habib Fenni, who met Grout a day earlier and was not aware of JPMorgan's troubles or the role the French village's new resident is alleged to have played in them.
Village restaurant owner Chantal Guerby, meanwhile, described Grout as "a nice guy who keeps himself to himself".
Neighbors said that Grout's parents have been coming to their holiday home for many years, with Grout also visiting from London once in a while.
The criminal investigation is focusing on whether anyone responsible for the trades deliberately tried to hide the losses by inflating the value at which they were recorded on JPMorgan's books at the height of the scandal.
Grout's lawyer, Edward Little, says his client has done nothing wrong.
"We're confident he will eventually be cleared of all wrongdoing," he told Reuters in New York before the indictment. "He's in France only because he moved there several months ago, not because he was fleeing anything."
Grout, who is in his mid-thirties, declined to answer questions from a Reuters reporter in Sarrazac on Tuesday, but a source with knowledge of the matter has said that he will offer to face the charges in the United States on the condition that he is granted bail.
Outside the family holiday home, Grout's father would only say "no comment" when asked if his son was available to speak. In a brief telephone conversation, after his mother said she would ask if he wanted to talk or not, an unidentified man said: "No comment. Goodbye. Have a nice day."
Reuters reported last week that Iksil, who earned his nickname after making outsized bets in a thinly traded derivatives market, is cooperating with the U.S. authorities and will not face any charges.
It is not clear when Martin-Artajo will appear in court in the United States. The Spaniard still lives in London but is travelling abroad on a summer holiday.
The Federal Bureau of Investigation in New York and the U.S. Securities and Exchange Commission (SEC), along with regulators in Britain, all opened investigations last year into the costly derivatives bets.
The case is still open, but JPMorgan is close to agreeing a deal with the SEC, which would require the bank to pay a penalty and admit faults, a source familiar with the matter said.
This all seems a million miles from tiny Sarrazac, located in a lush, rural region about a two-hour drive from Bordeaux, with the silence broken only by the half-hourly church bells.
There is a hospital away from the heart of the village and local businesses include a bakery and a real estate agent. But no bank.
(Additional reporting by Emily Flitter; Editing by Catherine Bremer and David Goodman)