Bruno Iksil, the former trader known as “the London whale” will most probably not face charges in the U.S. for the JPMorgan Chase loss of over $6 billion last year following bets on credit derivatives.
Iksil, a French national, has worked in the investment department of JPMorgan in London and is responsible for a large proportion of transactions that have caused a huge loss to the bank, affecting the reputation of the institution and forcing the resignation of a top JPMorgan executive.
The investigation started last spring by the U.S. Department of Justice aims, among other things, to determining the culpability of the traders in such situations. In other words, judges are trying to determine whether traders responsible for such damaging bets have knowingly evaluated the risks associated with these transactions, according to sources close to the investigation, quoted by the Wall Street Journal.
U.S. Securities Commission (SEC) began its own investigation on this matter. Both investigations are ongoing, but Bruno Iksil is not he focus of the investigators and will not be charged in the absence of new evidence, according to sources close to the situation.
It is not clear yet why Iksil is no longer under investigation. Former trader is cooperating with authorities and also with the internal investigation conducted by JPMorgan.
The conclusions of an internal investigation by the bank and a separate investigation of the U.S. Senate committee show that Bruno Iksil played a key role in causing the $6-billion loss to the bank, but he tried to warn his bosses on the huge risks assumed.
Iksil would have called the transactions “more and more monstrous” and “scary” in various telephone conversations or email messages.
Representatives of the parties involved have declined to comment. Investigators could reach a conclusion later this year, the sources said.
JPMorgan recently announced that it expects losses of $6.8 billion related to various criminal charges and civil lawsuits. Since the beginning of 2011, the bank incurred about $8 billion in losses, mainly as a result of legal settlements and building reserves for future payouts and fines.
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