Ex-JPMorgan Trader Slams Government's Case Federal prosecutors have portrayed Julien Grout as the quintessential Wall Street criminal, accusing the former JPMorgan Chase trader of "systematically and fraudulently" masking losses to protect his bonus. His lawyer found another way to describe him: as a scapegoat. In a statement on Tuesday, a day after the government formally indicted Mr. Grout and another trader in connection with their roles in a trading loss that cost JPMorgan more than $6 billion, Mr. Grout's lawyer returned fire on the government's case. Calling the indictment a "shocking development" and accusing prosecutors of bowing to political pressure, the lawyer, Edward Little, previewed what could become Mr. Grout's defense at trial. For one, Mr. Little indicated, the defense will depict Mr. Grout as a low-level employee who was simply following orders. Or, as Mr. Little put it, Mr. Grout was a "junior trading assistant acting under the direct instructions of his managers." Although the government described him as a vice president, the bank has tens of thousands of employees of that rank. Mr. Little also highlighted how traders have significant leeway to value their bets in the market for financial contracts known as derivatives, which led to the losses for JPMorgan. The derivatives market is known for its opacity, making it difficult to pinpoint an exact price in real time. "As the facts in this case are revealed, it will become clear that our client is innocent of any wrongdoing, and we look forward to his vindication," said Mr. Little, a partner at Hughes Hubbard & Reed. It is unclear, however, whether there will be a trial. After leaving JPMorgan in London, Mr. Grout returned to his native France, which typically does not extradite its citizens. Reluctant to turn himself in, Mr. Grout is seeking approval to travel freely between New York and Europe. The battle is playing out against the backdrop of JPMorgan's attempt to settle with the government. The bank, according to people briefed on the matter, is expected to pay about $800 million to government agencies in Washington - the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve - and the Financial Conduct Authority in London. The bank, the people said, also agreed to make a groundbreaking admission of wrongdoing, acknowledging that it should have caught the problem faster but instead had lax controls that allowed the traders to build the risky position and cover up their losses. The settlement, which comes at the urging of lawmakers and critics of Wall Street, is expected this week. Given the looming deal, Mr. Little said, Mr. Grout was "unjustly played as a pawn in the government's attempt to settle its highly politicized case against JPMorgan Chase." The United States attorney's office in Manhattan, which announced the indictment, declined to comment on Mr. Little's statement. The office, along with the F.B.I. and the S.E.C., first announced charges against Mr. Grout in August. The authorities also charged his boss, Javier Martin-Artajo. While Mr. Martin-Artajo oversaw the trading strategy, Mr. Grout recorded the value of the trades on a daily basis. They both worked for the bank's chief investment office in London. For the traders, problems emerged in early 2012 when losses mounted on their so-called credit derivatives bet, which allowed them to wager on the perceived health of companies like American Airlines. When losses soared, the government said, the traders deliberately "manipulated and inflated the value" of their positions to hide hundreds of millions of dollars in losses. The traders stopped recording the value of their bet in a "middle range," as generally required by JPMorgan, to some of the most generous possible figures. Of the 132 trading positions, according to the charges, 107 were "marked more favorably" than the midpoint. In its complaint against Mr. Grout, the government cited recordings of phone calls and instant messages that suggested Mr. Grout and Mr. Martin-Artajo knew they were on shaky ground. In an instant message, for example, Mr. Grout said: "I mean, I'm trying to keep a relatively realistic picture here." Weeks later, he remarked: "I don't want to show something that is too false." Mr. Martin-Artajo and Mr. Grout were charged with wire fraud, falsifying bank records and contributing to false regulatory filings. The government also charged them with conspiracy to commit those crimes. But a third trader - Bruno Iksil, nicknamed the London Whale because of the huge size of his wagers - avoided charges. Instead, he reached a so-called nonprosecution deal with prosecutors who will spare him from charges as long as he cooperates against his two former colleagues. In the indictment of Mr. Martin-Artajo and Mr. Grout, Mr. Iksil is referred to as a "co-conspirator." The government reached the deal after reviewing internal JPMorgan documents suggesting that Mr. Iksil tried to sound the alarms about the questionable valuations. In an instant message with Mr. Grout, for example, Mr. Iksil declared that "that he did not know where Mr. Martin-Artajo "wants to stop, but it's getting idiotic." Still, Mr. Little slammed the nonprosecution deal. "It is astonishing that the prosecutors are relying on Iksil's testimony when he is the one who taught Mr. Grout how the bank was marking the portfolio, gave specific instructions on where he should mark positions, and personally approved the marks on a daily basis," Mr. Little said. Mr. Grout was totally dependent on Iksil's instructions and relied in good faith on his expertise. A lawyer for Mr. Iksil declined to comment.