The FCA has dropped its three-year investigation into the former JP Morgan trader after trades led to $6.2bn (£4bn) in losses.
The Financial Times reports the regulator had sought to bring a civil claim against Bruno Iksil, known as the ‘London Whale’, for failing to prevent significant losses being masked through traders mismarking their positions.
But the Regulatory Decisions Committee, part of the FCA’s independent appeals process, has now ruled the regulator did not have a strong enough case to proceed.
The FCA says: “We can confirm that we will not be taking any further action.”
Iksil has struck an immunity deal with prosecutors in the US and is co-operating as a witness in criminal and civil proceedings.
JP Morgan was fined £137.6m by the FCA in September 2013 after failing to act when trading risk limits were breached.
Achilles Macris, who ran the London office of JP Morgan’s chief investment office, won a challenge at the Court of Appeal in May, which found the regulator had improperly identified him in the 2013 final notice. In June the FCA said it was seeking leave to appeal the decision from the Supreme Court.