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E. J. Bean
Commenting on the settlement, JPMorgan CEO Jamie Dimon expressed contrition: “We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them. … Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better Company.”9 In his 2013 annual letter to shareholders, Mr. Dimon was even more blunt, calling the London whale trade losses “a real kick in the teeth” and one of the ways in which the bank had “let our regulators down.”10 The second penalty was imposed by the U.S. Commodity Futures Trading Commission (CFTC) which fined JPMorgan $100 million for manipulating credit derivative prices through “reckless” massive trades. The CFTC wrote: [B]y selling a staggering volume of these [credit derivative] swaps in a concentrated period, the Bank, acting through its traders, recklessly disregarded the fundamental precept on which market participants rely, that prices are established based on legitimate forces of supply and demand.11
JPMorgan, again, admitted wrongdoing, including that its traders had acted recklessly in initiating massive trades intended to affect market prices, and paid the fine. Together, the civil fines assessed against JPMorgan exceeded $1 billion. The settlements also required JPMorgan to undertake revisions of its internal controls and procedures.12 In London, in addition to the civil fine on JPMorgan, U.K. authorities imposed a $1.1 million fine on the senior-most U.K. executive involved in the whale trades, Achilles Macris, for failing to fully disclose the trades to U.K. regulators.13 U.K. authorities did not fine any of the other three Londoners involved with the whale trades.
London Whale Indictments In contrast to the civil cases, criminal proceedings were unsuccessful. The U.S. Department of Justice initially indicted the two London-based JPMorgan employees most closely linked to hiding the whale trade losses, Javier MartinArtajo, who pushed the credit traders to cook the books, and Julien Grout, the junior trader who actually submitted the inaccurate figures. The charges against them included falsifying books and records and committing wire fraud.14 Neither proceeding named Bruno Iksil, the original so-called “London Whale.” When he was asked why, he pointed to his warning the bank against
