With JPM Set To Report, Rest Of Whale Team Leaves Company

Tyler Durden's picture

As JP Morgan prepares to report how much the blow up of its CDS in Q2 "boosted" earnings, not to mention how much "improving" conditions forced it to reduce loss reserves, the WSJ reports that the rest of "whale team", or those responsible for the CIO's $5 billion loss, have left the firm.

From WSJ:

Three London-based employees at the center of J.P. Morgan Chase JPM -1.59% & Co.'s multibillion-dollar trading blunder, including one known as the "London whale," have left the bank, according to people familiar with the company.

 

Achilles Macris, Javier Martin-Artajo and Bruno Iksil are the latest casualties of an episode that already has cost the bank $25 billion in market value and tarred the reputation of Chief Executive James Dimon as Wall Street's savviest risk manager.

 

All three worked for the Chief Investment Office, or CIO, the once-obscure unit that invests the bank's excess cash. Their outsize bets on certain corporate credit indexes led to just over $5 billion in losses in the second quarter—a figure the company is expected to disclose Friday as it discusses earnings for the just-ended quarter with investors.

 

Messrs. Macris, Martin-Artajo and Iksil were stripped of trading duties after the company became aware of the ballooning losses. They stayed on as employees past Ms. Drew's departure as the bank worked to unwind the trades and complete an internal review of what happened, though they had been expected to leave the company.

 

As of Thursday, the three men no longer were listed in the company's internal employment database, according to people close to the bank.

And with that the unwind of the JPM IG9-10 Year trade, courtesy of Blue Mountain of course, is likely over, because as we said back on May 15, only the departure of Bruno is the one sure bet that the bulk of the losing trade had been unwound: "As for the question of how much additional P&L loss JPM has sustained from Friday through today is a different matter entirely, and we are confident the next announcement from JPM will come momentarily, coupled with the announcement that Bruno Iksil, the last remnant of the CIO desk, and now having completed his duty of unwinding the trade that brought so much pain for Jamie Dimon, has been retired."

Now the only question left is how much recurring future net income has Iksil & Cie taken with him. If history is any indication, the market will soon realize that anywhere between 10 and 20% of the firm's net income is now permanently gone as the biggest internal hedge fund is fully unwound.