FCA fines ex JPMorgan banker for part in 'London Whale' trades

The Financial Conduct Authority has fined the former head of JPMorgan’s CIO International division £792,900 for failing to be open and cooperative with the financial watchdog at the time of the ‘London Whale’ trades.

Achilles Macris was responsible for a number of portfolios in his role at JPM, including the synthetic credit portfolio at the time of the trades.

The FCA said that between 28 March 2012 and 29 April 2012, Macris did not inform its processor, the Financial Services Authority, about concerns with the synthetic credit portfolio and as a result he “failed to meet the standards expected of an approved person”.

Mark Steward, director of enforcement and market oversight, said, “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. Mr Macris should have explained the position more squarely especially when he knew the Synthetic Credit Portfolio’s losses had worsened.”

The FCA said that at meeting on 28 March, Macris failed to provide information about the full extent of the difficulties that the synthetic credit portfolio was facing or take steps to ensure the FSA understood there were causes for concern with the portfolio.

Later on in April, Macris took part in a telephone call with the authority that provided him with a further opportunity to convey his concerns with the portfolio, but again, he failed to do so, the FCA said.

“Mr Macris should have appreciated that, by failing to inform the authority during the meeting and the call of the causes for concern and by allowing the authority to be reassured concerning the position of the synthetic credit portfolio, the message delivered was not an accurate reflection of the state of the synthetic credit portfolio,” the FCA said.