Fed May Press Charges Against 'London Whale'
March 06 2017 - 12:28PM
Dow Jones News
By Lucy McNulty
The Federal Reserve is considering legal action against Bruno
Iksil, the trader at the center of the "London whale" trading
debacle, according to a person familiar with the matter. Mr. Iksil
had thought he would face no further threat of charges, the person
said.
If the Fed presses charges, Mr. Iksil could face a massive legal
bill, fines and a permanent ban from working in finance, according
to the person.
Mr. Iksil found out about the possibility of action by the Fed
in a January phone call with his lawyers, the person said.
A spokesman for the Fed declined to comment.
The former trader, in his first interview in the almost five
years since he shot to fame and garnered his nickname as part of
the 2012 episode that led to $6.2 billion in losses for the largest
U.S. bank, said he welcomed the latest potential legal twist. "I
have to retrieve my reputation, my intellectual property and,
simply, my life. So far, all of this has been stolen," the
49-year-old Mr. Iksil said in the interview with Financial News,
conducted in Paris recently.
It is the only remaining threat of action facing the French
trader, who came to prominence for his role buying positions for an
enormous trading book at J.P. Morgan.
The Fed has until the end of the month to press ahead with legal
proceedings. U.S. law prevents these starting more than five years
after an alleged wrongdoing has occurred. The Fed's website says it
can take enforcement action against individuals affiliated with
banks its supervises for regulatory violations, unsound practices
or breaches of fiduciary duty.
In July 2015, the U.K.'s Financial Conduct Authority took the
unusual step of halting its investigation into Mr. Iksil's role in
the J.P. Morgan losses. It was thought then that Mr. Iksil would
face no further enforcement action. The trader had signed a
nonprosecution deal with the U.S. Justice Department in 2013 and
agreed to give evidence in proceedings against two of his
colleagues.
He has also been helping the U.S. Securities and Exchange
Commission with its investigation into the London whale affair.
If the Fed pursues action against him, Mr. Iksil said he would
take the chance to be heard.
"I have to fight," he said. "I have no choice...I have to make
people be aware of what really happened."
Mr. Iksil has spent the past five years at home with his family
in France, about 50 miles south of Paris, as a string of financial
authorities in the U.K. and U.S. eventually decided not to press
charges against him.
He said the "London whale" nickname unfairly turned him into the
scapegoat for a much broader problem. He has since railed against
the spotlight on him but said he is determined for his own view of
the scandal to get a public hearing.
He told Financial News he was a pawn and that he tried to warn
senior executives at J.P. Morgan of impending peril. But he was
fired, his reputation was shredded and most of his
multimillion-dollar compensation was clawed back, he said.
"I was public enemy No. 1," Mr. Iksil said. "Everyone, every
single authority, everyone, I think, reading the press articles,
wanted to behead me or destroy me or smash me."
Mr. Iksil said "a lot of people" have told him to move on, but
he said that is "impossible."
To that end, he is writing a book about the affair. The latest
draft includes his allegations that senior executives at J.P.
Morgan should take more of the blame for the losses. He has no
publishing contract.
He has also been pushing the SEC to make public the deposition
he made in 2016. The SEC declined to comment.
"I've been waiting now for [almost five] years," he said. "I
think it's time to say the things. The truth has to be told."
J.P. Morgan declined to comment.
Write to Lucy McNulty at Lucy.McNulty@dowjones.com
(END) Dow Jones Newswires
March 06, 2017 13:13 ET (18:13 GMT)
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