Spain's national court rejected a US demand to extradite Spanish national Javier Martin-Artajo, who is accused of being the senior figure in the 2012 scandal covering up $6.2 billion (€5.7 billion) in trading losses at the US banking giant.
Martin-Artajo fought against the extradition request on the grounds of his Spanish nationality and because his actions did not take place in the US but at the London branch of the US bank, according to documents released by the court Thursday.
The court's decision may be appealed.
US federal prosecutors filed criminal charges in 2013 against Martin-Artajo and another former JPMorgan employee, Frenchman Julien Grout, alleging they kept false records on trades, committed wire fraud and submitted false US securities filings when they worked for the bank in London.
A third ex-JPMorgan banker, French national Bruno Iksil -- originally identified as the "London Whale" responsible for the trades -- was cleared of criminal responsibility after cooperating with prosecutors.
Spain arrested Martin-Artajo in August 2013 on a US warrant.
The US complaint documents how the London team allegedly falsified financial records after Martin-Artajo was pressured from higher-ups about losses in early 2012.
Martin-Artajo directed underlings to calculate trades and price assets in such a way as to discount the losses, according to the complaint, which cites phone calls and emails.
As a result of the false records, JPMorgan in July 2012 understated losses from its corporate private equity division, which included the London trading operation, by $459 million.
The US charges carry a maximum sentence of 65 years in prison and a fine of at least $5 million.
JPMorgan paid a fine of about $1 billion for poor oversight related to the trading loss, and US regulations coming into force will restrict banks from trading on their account like JPMorgan had been doing.
While a number of executives had to step down, JPMorgan chief executive Jamie Dimon kept his job.