The Financial Conduct Authority has lost its appeal of a ruling that a former JP Morgan Chase banker in the ‘London Whale’ case was too identifiable in a regulator’s reports.
Achilles Macris, complained in 2013 that the FCA identified him in its highly critical assessment involving the ‘London Whale’ trading debacle, without giving him the chance to defend himself or providing him a copy of the fine.
In 2013, the FCA published a decision notice against JP Morgan Chase Bank whereby the bank was fined £137.6m as a result of trading losses incurred by the bank’s Synthetic Credit Portfolio, a trading portfolio housed within the bank’s chief investment office.
Those losses amounted to $6.2bn (£4bn) by the end of 2012 and occurred as a result of what became known as the “London Whale” trades, which were conducted by traders Javier Martin-Artajo and Bruno Iksil, but ultimately overseen by Mr Macris.
Mr Macris filed a claim against the FCA alleging that he could be identified in decision and final notices.
A judge in the Upper Tribunal agreed with this assessment last April, but the regulator appealed, arguing that it had not explicitly named Mr Macris in the publications.
However, in Court of Appeals judge Elizabeth Gloster decided on 19 May to uphold the initial ruling, stating that “the judge was in my judgment clearly right to conclude as he did”.
She added that the FCA’s notices to JPMorgan identified Mr Macris through reference to “CIO London management” clearly in the context of a particular individual, rather than a body of people.
This meant that people working in the financial services industry “would reasonably have been able to identify Mr. Macris from the statements made in the notice” even though he was not specifically named, said Ms Gloster.
The regulator was more successful in a related case in March, with the High Court dismissing an application for a judicial review from Julien Grout, a junior derivatives trader and assistant to Mr Iksil, the more senior trader known as the “whale”.
The court stated that the FCA had the right to leave Mr Grout out of the final document without giving him a chance to respond any allegations, while Mr Macris was identified by a title that could allow people to speculate as to his name.
peter.walker@ft.com
