London Whale’s boss at JPMorgan fined over £4.3bn losses scandalComments Off on London Whale’s boss at JPMorgan fined over £4.3bn losses scandal
The boss of the so-called London Whale trader who lost JPMorgan $6.2 billion (£4.3 billion) in unauthorised trading has been fined £793,000 for not revealing the losses to regulators.
Achilles Macris was head of the bank’s chief investment office in London where the Whale, Bruno Iksil, carried out his trades.
The Financial Conduct Authority said Macris failed to inform it about growing concerns the bank had over the loss-making trades in 2012. He deliberately told regulators that the portfolio involved had been balanced and did not require further trading even as more losses were running up. But Macris claimed today’s ruling was a “major climbdown” by the FCA and that he would continue to challenge previous allegations made against him by the regulator.
Iksil, who is co-operating with US prosecutors in return for not being prosecuted, has never been fined. The FCA abandoned attempts to fine him a reported £1 million last year.
JPMorgan’s chief executive Jamie Dimon initially dismissed the Whale’s trading losses as a “storm in a teacup”.
Macris had been the main contact with the FCA’s predecessor, the Financial Services Authority, in relation to the CIO and the Synthetic Credit Portfolio, where Iksil ran up hundreds of millions of dollars of losses. The FCA said he failed to inform the regulator at one meeting and during phone calls in March and April of 2012 of the significant losses being run up by Iksil.
Mark Steward, director of enforcement and market oversight at the FCA, said: “A failure to communicate openly with us can affect the well running of markets and cause unnecessary harm to investors, especially in times of financial stress or crisis. Macris should have explained the position more squarely especially when he knew the Synthetic Credit Portfolio’s losses had worsened.”
The FCA said that the SCP began running up significant losses from the start of 2012 and by March 23 the front office of the bank was instructed not to execute any further trades with Macris, asking for a daily risk report to be prepared. But at a supervision meeting with the FSA five days later, where he admitted the SCP had made a loss of $200 million he said it was balanced and did not require additional trading.
The following month in a phone call with the FSA, Macris again failed to tell it about the bank’s growing concerns over the portfolio and the extra measures it had taken to address them. Macris’s fine would have been £1.1 million but the FCA agreed a 30% discount to settle with him.
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