Ex-bosses at JPMorgan unlikely to face charges in 'Whale' scandal

Thu Aug 15, 2013 1:07am EDT
 
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By Emily Flitter and David Henry

NEW YORK (Reuters) - The JPMorgan Chase & Co executives who supervised the traders at the center of the "London Whale" scandal are unlikely to face any charges over a trading debacle that cost the largest U.S. bank more than $6.2 billion, people familiar with the probe said.

Federal prosecutors on Wednesday brought criminal charges against two former JPMorgan traders - Javier Martin-Artajo and Julien Grout - accusing the pair of deliberately understating losses on the trades on JPMorgan's books.

The complaints make only passing reference to their former bosses. Neither Ina Drew, the bank's former chief investment officer, nor Achilles Macris, a former top Chief Investment Office executive, are mentioned by name in the complaints filed in New York.

The filings refer to Drew and Macris only by their titles and said they put pressure on their subordinates at one point to deal with the high degree of risk being taken on in the portfolio of derivatives trades that led to the losses.

There is no allegation in the complaints that either Drew or Macris did anything wrong or encouraged Martin-Artajo and Grout to conceal the losses, which first began to be publicly disclosed in May 2012.

Bruno Iksil, the trader most identified with the losses, is cooperating with federal prosecutors in an agreement which means he will not face charges. Iksil was known as "the London Whale" because of the size of derivatives trades he made.

U.S. Attorney Preet Bharara, when asked by reporters on Wednesday about the prospect of additional actions against higher executives, said: "These are the charges we have brought." He said that the investigation is ongoing.

That the two senior executives may emerge from the year-long investigation unscathed is a sign that the scandal may not do much additional damage to the bank's image or the reputation of its chief executive, Jamie Dimon.   Continued...

 
Ina Drew, (2nd L), former Chief Investment Officer of JP Morgan Chase Bank, confers with an aide before testifying before the Senate Homeland Security Investigations Subcommittee in Washington March 15, 2013. REUTERS/Gary Cameron