Bloomberg News

Ex-JPMorgan Executive Macris Wins London Whale Report Case (1)

April 11, 2014

JPMorgan Chase & Co. Offices Stand in London

The offices of JPMorgan Chase & Co., left, stand in London. Photographer: Simon Dawson/Bloomberg

Achilles Macris, a former JPMorgan Chase & Co. (JPM:US) executive who oversaw the unit where a trader known as the London Whale caused $6.2 billion in losses, won the chance to respond to allegations he misled regulators.

Macris won a ruling that he should have been allowed to provide comments to the Financial Conduct Authority before the regulator published a report on Bruno Iksil’s losses. While Macris wasn’t named, he had third-party response rights because his identity could be determined, a finance tribunal in London found.

Macris, who led the international chief investment office at the bank, challenged the regulator over its findings in October. The FCA found in September that the “conduct of CIO London management deliberately misled the authority about the situation,” according to the regulator’s notice on the fine. He wasn’t mentioned by name.

Macris “looks forward to challenging the findings made against him in the final notice, which fail to take proper account of the actions he took and mischaracterize his dealings with the FCA,” a spokesman for his lawyers at Clifford Chance LLP said in an e-mail.

The regulator is seeking permission to appeal the ruling, it said in a statement today. If the request is rejected or Macris wins on appeal, then he’ll be able to dispute the FCA’s findings against him at the tribunal.

Bad Bets

The findings “clearly identify and criticize him,” his lawyers said in a statement in October. “Macris strenuously denies the assertions made by the authority in the final notice as being factually wrong. Those assertions fail to take proper account of the actions he took and mischaracterize his dealings with the authority at the relevant time.”

Iksil’s bad bets led to $920 million in penalties from regulators including the U.S. Securities and Exchange Commission and the FCA, which levied a 138 million-pound ($231 million) fine.

Javier Martin-Artajo, a former JPMorgan banker fighting extradition to the U.S. from Spain over the trading losses, is also challenging the FCA at the finance tribunal. Martin-Artajo, who oversaw synthetic credit trading at the CIO in London, filed the case last month.

Martin-Artajo was indicted in Manhattan federal court in September for allegedly helping to hide the losses caused by Iksil. The SEC said in a parallel lawsuit that Martin-Artajo and Julien Grout, a trader who worked for him, engaged in a scheme to enhance the portfolio’s apparent performance and thereby curry favor with supervisors.

Jennifer Zuccarelli, a spokeswoman for JPMorgan, declined to comment.

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net Keith Campbell


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