Belfast Telegraph

FCA 'did not wrongfully identify trader linked to London Whale scandal'

The Supreme Court has ruled that Britain's financial watchdog did not wrongfully identify a JPMorgan executive linked to the London Whale scandal.

The court said the Financial Conduct Authority (FCA) had successfully hidden Achilles Macris's identity when it fined the bank for running up 6.2 billion US dollars (£4.3 billion) in losses through a complex financial instrument called a synthetic credit portfolio.

The landmark judgement could potentially shield the agency from legal challenges by other traders who claim they were not given a chance to contest the FCA's findings before it published a penalty notice.

JPMorgan was hit with 920 million US dollars (£739 million) in fines by US and UK regulators in 2013 after the London Whale scandal emerged.

The FCA also fined Mr Macris £792,900 for not informing its predecessor - the Financial Services Authority - about the huge losses his department was amassing between March 28, 2012 and April 29, 2012.

Mr Macris, who won a legal case against the the watchdog in the Upper Tribunal and the Court of Appeal, was the head of the bank's chief investment office in London which made the London Whale trades.

An FCA spokesman said: "The FCA is pleased there is now a final ruling on the issue and is considering the impact of the Supreme Court's judgement on the other third-party references currently before the tribunal."

Mr Macris's unit included French rogue trader Bruno Iksil, who became known as the London Whale for the size of the bets the bank was making.

Chris Dyke, lawyer at criminal and regulatory law firm Corker Binning, said: "This judgment of the Supreme Court will be a relief for the FCA.

"The overturned Court of Appeal decision exposed the tension between the FCA's desire to quickly settle regulatory investigations into financial institutions and its public criticism of the employees of those companies necessitated by those settlements.

"The time and resources required to deal with the interventions and representations of a potentially very large pool of individuals would have been a very heavy burden for the FCA and could have significantly slowed the speed of regulatory enforcement."