Achilles Macris: FCA fines ex-JP Morgan banker £800,000 over ‘London Whale’

Achilles Macris penalised for failing to be open about trades that led to £4.2bn loss

Achilles Macris was boss of JP Morgan’s bank division (Getty Images)

The City watchdog has fined a former executive at JP Morgan Chase nearly £800,000 for failing to be “open and co-operative” over the bank’s controversial £4.2bn “London Whale” losses.

Achilles Macris was boss of JP Morgan’s bank division when the risky dealings of trader Bruno Iskil, nicknamed the London Whale, resulted in massive losses.

On Tuesday he described the fine as a “massive climbdown” by the Financial Conduct Authority (FCA). Mr Macris has been fighting the regulator for months, claiming he could be identified in the settlement report and the allegations that he deliberately misled regulators were wrong.

“Now the FCA has accepted I did not deliberately mislead it, I have decided not to prolong what has been a drawn- out and burdensome process and have settled with the FCA on the basis that there is no prohibition on my working in the regulated sector,” he said.

In its sanctions notice, the FCA said Mr Macris should have explained the situation “more squarely”. The regulator said he received a 30 per cent discount on the £1,132,747 fine, reducing it to £782,000. The bank itself was fined £138m in 2013.

Mr Macris was the approved person dealing with the Financial Services Authority (FSA), the FCA’s predecessor. When concerns about the London Whale trades emerged, the FCA said Mr Macris failed to deal in an open and co-operative way with it.

Mark Steward, the FCA’s enforcement and market oversight director, commented: “A failure to communicate openly with us can affect the well-running of markets and cause unnecessary harm to investors, especially in times of financial stress or crisis. Regulators need open communication with firms so better decisions can be made sooner. Mr Macris should have explained the position more squarely, especially when he knew the losses had worsened.”

In FSA supervision meetings where the deals were discussed Mr Macris did not provide information about the full extent of the diffi- culties or that there were causes for concern, the FCA said. Jamie Dimon, JP Morgan’s chief executive, later called the bank’s dealings “flawed, complex, poorly reviewed, poorly executed, and poorly monitored” .

Mr Macris defended his role. He said the FCA’s final notice in 2013 wrongly and unfairly accused him of deliberately misleading the regulator before it heard his version of events. “I have spent four years trying to clear my name and the FCA has finally accepted this allegation against me was utterly wrong.”

The Supreme Court, where he is seeking to force the FCA to remove the statements it made about him from the JP Morgan notice, would further vindicate him, he believes.

He criticised the FCA for wasting public funds trying to justify its position. He said the regulator had “ignored” his 30-year financial services industry track record of “open and co-operative relationships with regulators”. He remained “profoundly concerned” about the behaviour of FCA enforcement staff who made unfounded public allegations against him without a fair hearing – which “it has now had to withdraw but which have significantly damaged my reputation and career”.