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FCA fines ex-JP Morgan boss £793k over London Whale trades

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The FCA has fined the former head of JP Morgan’s CIO international division £792,900 for failing to co-operate with the regulator over his role in the so-called “London Whale trades”.

Between March 2012 and April 2012 the FCA says Achilles Macris did not inform the regulator of concerns about the synthetic credit portfolio he was responsible for, which had been hit by “significant losses” at the beginning of the year.

On 23 March 2012 the front office was instructed that no further trades should be executed on the portfolio until discussions had taken place.

Macris asked for daily risk reports for the synthetic credit portfolio be produced and requested help from outside his division. He also arranged daily progress meetings with the CIO risk department and the front office. Despite these measures the synthetic credit portfolio continued to suffer losses.

On 28 March 2012 Macris attended a supervision meeting with the then FSA.

He told the regulator the portfolio had made a loss of $200m, and that it had experienced rebalancing problems.

But Macris also told the FSA the portfolio was now balanced and did not require additional trading.

In a phone call with the FSA on 10 April 2012, he said there had been no material changes since the supervision meeting, despite knowing losses had worsened.

FCA director of enforcement and market oversight Mark Steward says: “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.

“Regulators need open communication with firms so that better decisions can be made sooner. Macris should have explained the position more squarely especially when he knew the synthetic credit portfolio’s losses had worsened.”

Macris won a challenge at the Court of Appeal in May, which found the regulator had improperly identified him in the final notice issued against JP Morgan in 2013.

JP Morgan was fined £137.6m by the FCA in September 2013 after failing to act when trading risk limits were breached.

Bruno Iksil, dubbed the London Whale, was among the traders on the portfolio that suffered $6.2bn in losses. The FCA dropped the case against Iksil last July.

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