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Free Willy: FCA Drops Case Against London Whale
Once upon a time, at JP Morgan’s London-based internal hedge fund CIO unit, a legend was born.
Bruno Iksil — better known as “The London Whale” or “Voldemort” or “He Who Must Not Be Named” — carved out his place in the annals of CDX trading history when a tail hedge gone wrong effectively forced him to sell massive amounts of protection on IG.9 back in Q1 of 2012.
Long story (and it is a very long story) short, Iksil’s footprint in the market became so large that he was eventually picked off (or perhaps “harpooned” is more appropriate) by Boaz Weinstein (a legend in his own right) among others. One epic Jamie Dimon public relations blunder and several billion dollars later, and the world had learned a valuable lesson about what it means when a bulge bracket bank says it is “investing” excess deposits.
Needless to say, some people were curious to know who knew what and when (and who might have tried to cover up the mounting losses) in London and the legal proceedings with various former members of the team are ongoing, but given what we know about the generalized reluctance to prosecute white collar crime mistakes, it shouldn’t come as any surprise that Iksil, who is already off the hook in the US after going to UBS route, has been cleared in the UK. FT has the story:
The UK financial watchdog has dropped its investigation of Bruno Iksil, the former JPMorgan trader known as the “London Whale” whose trades led to $6.2bn in losses, clearing him in the three-year probe.
The Financial Conduct Authority’s enforcement division sought to bring a civil action against Mr Iksil for failing to prevent or detect mismarking within JPMorgan’s chief investment office.
But its internal panel of independent experts, the Regulatory Decisions Committee, ruled that the watchdog did not have a strong enough case to proceed.
“We can confirm that the FCA will not be taking any further action,” the authority said.
Mr Iksil, who lives in France, has already avoided criminal charges in the US by striking an immunity deal with prosecutors there in exchange for his co-operation.
His lawyer, Michael Potts, at Byrne and Partners, said: ??“It is rare for the RDC to dismiss an FCA enforcement case at this very initial stage of the disciplinary process. Mr Iksil has fully co-operated throughout the FCA investigation and will continue to co-operate as a witness in the ongoing criminal and civil proceedings in the USA.”?
Julien Grout, a junior derivatives trader on the desk, and Mr Iksil’s former boss, Javier Martin-Artajo, who was a managing director at the bank, are both being prosecuted in the US for their roles in the affair. They deny wrongdoing. The FCA is not seeking to bring a case against either man.
The only person still being investigated by UK authorities in connection with the 2011 losses is Achilles Macris, who ran the London office of the bank’s chief investment office and oversaw its synthetic credit portfolio team. It was in that division where trades in credit derivatives ultimately led to the trading losses in 2012.
London-based executives in the CIO “deliberately misled” regulators examining the derivatives positions, “deliberately reassuring” officials that they were “simply” adjusting a hedging position while internally admitting to being “in crisis mode” over mounting losses, the regulators found.
And so, another episode of Wall Street's Costliest Gambles ends with the following familiar disclaimer: "No human traders were jailed or otherwise harmed in the making of this program."
But before you get angry just remember, it's only a "tempest in a teapot"...

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Hey, everybody makes mistakes, right?
First rule of being a white collar snitch: have enough dirt on someone else high in your corporate hierarchy to rat out. This way if they are powerful enough, they can arrange for charges to be dropped for you before they can be implicated or indicted as well.
Well said Alaric...and we should all remember these words that Niccolo Machevelli opined...
So Navinder Singh Sarao will also have his case dropped ?
Well, they freed Corzine too, right?
To recap: London whale, John Corzine, Martha Stewart....Which of these is an ex-convict?
ha ha ha
Just don't walk out of 7-11 with a donut you didn't pay for. You will might get shot, or do 5-10 years.
Edit; The law really does not apply to these people.
This will be remembered.
Go long re: Nail "Fasteners"...
TPTB are scared of what might come out in court if they proceed,
The courts don't matter anymore.
True, but the lies must be hidden from the public.
To quote Rage Against the Machine...
What we don't know keeps the contract alive!
Not really. Psychopaths laugh at the court system because they have no moral convictions and lie freely if it is in their interests. They do like dragging moral individuals in to court because they can use their truthful testimony against them and further their power.
Can you imagine living a life with no guilt, moral compass and lust for insatiable power? The stupid ones end up in jail and the smart ones in DC.
Miffed
WTF? I was guilty, but my lawyer used {atty. client privilege} to intimidate the prosecution.
So, the head of the London derivatives JPM unit must be a pedofile.
One guy on here likes to end with the 'The bankers must repay us' schtick.
Bullshit.
The banksters are just crows.
It's the politicians who are truly most sick. And they are the enemy.
Banksters would naturally die in a healthy and free environment.
Blame it on 'corporations'...Blame it on 'wall street'....Blame it on 'capitalism'..
BULLSHIT.
It's evil. Pure enough. It's EVIL.
And 'government' is it's handmaiden.
WRONG. It is absolutely the bankers. Period, end of story.
I'm not sure if you are right but I like the conviction. Hold people personally responsible for thier behavior.
If they rip off grandma for 10k. they must repay it with interest. If they can't they have to do time until they can.
If debtors prison is good for the rest of us...
So, who walks away with billions and who walks away with asswipe money?
Look at that and you'll see who's the lord and who's the lackey.
Plenty of blame to go around, but the politicians are just drones, they would be nothing without the backing of the bankers and the media.
When you have an ignorant, lazy, selfish voting public, all it takes is some money and you can buy any election. The very best man, say a Ron Paul, can easily be taken down by a media smear campaign. So when other politicians see this, they say why should I take a risk, take a stand, the media will only demonize me and the idiot public will buy everything they are told by the media.
Until the public starts to understand the media is just a tool of manipulation, propaganda, we are subject to the whims of the powerful.
Bruno? Boaz? Julien? Javier? Achilles? This confederacy of dunces is worldwide! But who's the genius they are all in league against?
so they're dropping the charges on this guy but "flashcrash" kid is still rotting in solitary? you keep thinking there's nothing that "justice" authorities can do to make themselves look like bigger charicatures & yet the just keep raising (or more accuratlye LOWERING) the bar...
Great job UK. Work a bit harder and you'll be as corrupt in banking regulation as the US.
On a personal note I would like to commend you on allowing two other thieves to escape prosecution.
After 3 years in custody and appeals for robbing Snoras Bank of Lithuania and a sister bank in Latvia of billions, when the final appeal was denied you let Ramondas Baranauskas (Lithuanian) and Vladimir Antonov (dual Lith and Russian) slip out of the UK to Russia. I think your excuse was "they violated the terms of their probation" when the last appeal was denied and extradition to Lithuania was to proceed.
Let the Muslims rip you a new a$$hole with my blessing.
Uhhh, the City of London Corporation already has laws making it perfectly legal to lie and steal, that which is illegal in most other parts of the world. Ever notice the early morning slams on PMs when London opens. Naked shorts hitting the fan.
Turn in a friend, get out of the pen.
I'm getting so CYNKcal in my old age; investigate now means hide or destroy evidence or delay the prosecution of wrong-doing; seeing the word TRUST in a business name means Don't; Wealth Management means we manage your wealth into our pockets; etc. etc. etc. Orwell was right with newspeak.
Where are the details of Bruno's life and historical compensation at JPM ? That should be easily determined and reported. I mean they clobbered the Indian dude Navinder Sarao and gave his life story and reported o where he had accounts , how much $$ were in the accounts... etc.
And Navinder doesn't live in "France"... he was living in his parent's basement. Where was Bruno living? Hello Jamie ?