Tag Archives: London Whale

Hillary Should Ask Jamie Dimon What Kind of Genius Loses $6.2 Billion

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Yes, Hillary should ask Jamie “tempest in the teapot” Dimon  that question.

Yesterday, building on the momentum afforded her by a series of articles in the New York Times, Hillary Clinton asked the audience at a campaign stop in Toledo, Ohio: “What kind of genius loses a billion dollars in one year.” Clinton was referring to the New York Times revelation on Sunday that Donald Trump’s 1995 tax return showed a loss of $916 million. (See video clip below.)

If Hillary really wants to know what kind of genius can lose a billion dollars in one year or $6.2 billion in the case of traders at JPMorgan Chase, she should ask the bank’s CEO Jamie Dimon. The $6.2 billion London Whale loss at JPMorgan Chase is far more scintillating a feat since it involved wild derivative gambles in London in 2012 using the taxpayer-backstopped, insured savings deposits at the largest bank in the U.S. The U.S. Senate’s Permanent Subcommittee on Investigations conducted an in-depth investigation and report of the matter. The Chairman of the Subcommittee at the time, Senator Carl Levin, stated that JPMorgan “piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight, and misinformed the public.”

Read on.

JPMorgan Investor Suit Accord Is Approved by U.S. Judge

  • Bank agreed to pay $150 million to end London Whale suit
  • Pension funds said high-risk trades hidden from investors

JPMorgan Chase & Co. won a judge’s approval to pay $150 million to settle investor claims that it hid as much as $6.2 million in losses caused by a trade dubbed the London Whale.

U.S. District Judge George Daniels in New York on Tuesday accepted the accord, which ended a suit brought by a group of pension funds in 2012. They accused JPMorgan of turning its London-based Chief Investment Office in London into a “secret hedge fund” that caused the losses.

The accord in the class-action suit “is adequate and reasonable,” the judge said.

The bank told investors that the office’s primary role was managing risk, but the lawsuit alleged it was instead engaging in risky trades to generate profits.

Ohio pension funds and other plaintiffs claimed they incurred tens of millions of dollars of losses because their fund managers were given false and misleading information. Bruno Iksil, who became known as the London Whale because he amassed large, market-moving positions in credit derivatives, made the trades for the bank.

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London Whale’ Breaks Silence

The trader at the center of the “London Whale” trading debacle broke nearly four years of silence by taking aim at former employer J.P. Morgan Chase & Co., saying he was made a scapegoat for trades that were “initiated, approved, mandated and monitored” by senior management.

Bruno Iksil also said that he resents the London Whale nickname, which was devised by rival traders to dramatize the size of J.P. Morgan’s bets in corporate-debt markets.

In a single-spaced letter exceeding three pages and sent to publications including Financial News, Mr. Iksil contends the bank and the news media misrepresented his role in the 2012 episode, which led to more than $6 billion in losses for the nation’s largest bank and a handful of personnel changes.

“For no good reason, I was singled out by the media,” Mr. Iksil writes.

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Ex-JPMorgan Executive Fined $1.1 Million in ‘London Whale’ Case

A British regulator said on Tuesday that it had fined a former JPMorgan Chase executive for failing to be “open and cooperative” about concerns regarding trading that eventually cost the bank more than $6 billion in losses in 2012, an episode known as the London whale.

The regulator, the Financial Conduct Authority, said that Achilles Macris, a former executive in charge of JPMorgan’s international chief investment office in London, had been fined 792,900 pounds, or about $1.1 million, for failing to report concerns regarding the bank’s synthetic credit portfolio in March 2012 and in April 2012.

The chief investment office was created to invest JPMorgan’s own money and to help offset potential losses in the bank’s other businesses.

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JPMorgan ‘London Whale’ ERISA Fight Heading To 2nd Circ.

Law360, New York (January 22, 2016, 1:16 PM ET) — JPMorgan Chase & Co. employees claiming their retirement plan tanked after the $6 billion “London Whale” fiasco told a New York federal court on Thursday that they intend to appeal the potential class action’s dismissal to the Second Circuit.

U.S. District Judge George B. Daniels on Jan. 8 dismissed the case, finding that JPMorgan’s actions taken as a sponsor of the plan didn’t amount to fiduciary functions that triggered liability under the Employee Retirement Income Security Act.

The current and former employees bringing the suit said…

Source: Law360

JPMorgan Chase to Pay $150 Million to Settle ‘Whale’ Suit

JPMorgan Chase & Co. agreed to pay $150 million to settle investor claims that it hid from them as much as $6.2 billion in losses caused by a trader dubbed the London Whale.

A group of pension funds accused JPMorgan of turning its chief investment office in London into a “secret hedge fund” that caused the losses. The bank told investors that the office’s primary role was managing risk when in fact it was engaging in trades to generate profit, they said.

The settlement “reflects a reasonable compromise concerning the merits of lead plaintiffs’ claims” and “the obstacles to prevailing at trial,” the pension funds said in a filing seeking court approval of the deal.

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2nd Circ. Again Tosses ‘London Whale’ Derivative Suit

Law360, New York (December 3, 2015, 5:09 PM ET) — The Second Circuit on Thursday affirmed for a second time a decision dismissing derivative claims that JPMorgan Chase & Co. and its executives failed to fully investigate the bank’s $6 billion “London Whale” trading loss, after receiving clarification from the Delaware Supreme Court.

The Second Circuit said that Thursday JPMorgan’s board had the discretion to investigate claims related to the $6 billion London Whale trading loss that a shareholder has raised. (Credit: AP) The three-judge panel again upheld U.S. District Judge George B. Daniels’ March 2014…

Source: Law360