Tag Archives: London Whale

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

JPMorgan ‘London Whale’ Traders To Be Deposed Overseas

Law360, New York (October 21, 2015, 2:48 PM ET) — Two former JPMorgan employees who are living overseas are not required to appear in the U.S. for depositions over the bank’s $6 billion “London Whale” trading loss, a New York federal judge said Wednesday, potentially sparing them from arrest on criminal charges.

During a hearing in Manhattan court, Judge George Daniels said he would allow former JPMorgan Chase & Co. traders Javier Martin-Artajo and Julien Grout to sit for depositions in their home countries of Spain and France, respectively. The U.S. Securities and Exchange Commission had…

Source: Law360

JPMorgan Investors Win Cert. In ‘London Whale’ Suit

Law360, Los Angeles (September 29, 2015, 9:50 PM ET) — JPMorgan will have to face a class of potentially hundreds of thousands of investors accusing the bank of misleading them about the riskiness of derivatives trading before the $6 billion “London Whale” trading fiasco, a New York federal judge ruled Tuesday.

A New York federal judge shrugged off on Tuesday JPMorgan’s contentions that some of the class members who bought their shares after the bank partially disclosed some losses were differently situated. (Credit: AP) The investors, led by a group of retirement funds, won their bid…

Source: Law360

‘London Whale’ Appeal Mired by Murky Laws

(CN) – Delaware law does not offer clear direction on how to judge whether JPMorgan Chase’s board adequately investigated its executives’ actions and alleged misstatements in the London Whale debacle, the Second Circuit said.
Bruno Iskil, the former head of Chase’s Synthetic Credit Portfolio, earned the London Whale nickname when he was blamed for $6.3 billion in losses in 2012, stemming from bad bets on credit default swaps he made for the bank.
The bank paid $920 million to U.S. and U.K. regulators in 2013 for its “unsafe and unsound practices” that led to the scandal.
Shareholders, led by Ernesto Espinoza, sued JPMorgan derivatively, seeking to hold its board liable for failing to oversee its traders.
Espinoza challenges JPMorgan’s decision not to take any further action against the alleged wrongdoers, contending that the board’s investigation into his demand was unreasonably narrow.
“Specifically, Espinoza alleges that the board’s investigation only looked into the underlying trading losses, but did not explore certain alleged misstatements that JPMorgan executives made about those losses. Espinoza asserts that these misstatements exposed JPMorgan to significant liability, and should have led the board to take action against the executives involved,” according to the appeal court’s Wednesday opinion.
In particular, CEO James Dimon stated in April 2012 that the media’s attention on the losses were a “complete tempest in a teapot.” Espinoza asserts that this misstatement exposed JPMorgan to litigation, regulatory liability, and inflated the bank’s share price by misleading investors about the scope of JPMorgan’s risk exposure.
Espinoza argues that because the board never investigated the misstatements made by Dimon and others, it never exercised any business judgment that could be entitled to protection under the business-judgment rule.

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