FCA fines former JP Morgan boss £792,900

The FCA has fined the former Head of JP Morgan's CIO International, Achilles Macris, £792,900 for "failing to be open and co-operative" with the Authority.

Related topics:  Finance News
Rozi Jones
9th February 2016
FCA

Macris was responsible for a number of portfolios, including the synthetic credit portfolio which became known as the ‘London Whale’ trades.

In his role, he was the main contact with the FSA, but did not inform the Authority about concerns with the synthetic credit portfolio.

The portfolio began to suffer significant losses from the beginning of 2012 and on 23 March the front office was instructed that no further trades should be executed on the portfolio until discussions had taken place.

Despite Macris requesting assistance from outside CIO and arranging daily progress meetings with CIO Risk and the front office, the synthetic credit portfolio continued to suffer losses.

On 28 March 2012 Mr Macris attended a supervision meeting with the FCA, in which the Authority was informed that the portfolio had made a loss of $200m, and that it had experienced rebalancing problems, but was told that it was now balanced and did not require additional trading.

Mr Macris did not reveal the extent of the difficulties that the synthetic credit portfolio was then facing or take steps to ensure that the Authority understood there were causes for concern with the portfolio.

In a subsequent phone call with the Authority which was set up to discuss the publication of articles about the ‘London Whale’, Macris stated that there had been no material changes since the supervision meeting and that there were not wider causes for concern with the synthetic credit portfolio.

Mark Steward, FCA Director of Enforcement and Market Oversight, said:

"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 that better decisions can be made sooner. Mr Macris should have explained the position more squarely especially when he knew the synthetic credit portfolio’s losses had worsened."

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