Ex-JPMorgan Trader Wins FCA Identity Suit Over London Whale

  • Trader was improperly identified in documents, court says
  • London Whale colleague Grout now seeks to clear his name

A former JPMorgan Chase & Co. trader involved in the London Whale case was improperly identified by the U.K. regulator in its penalty notice over the scandal, a court ruled.

Julien Grout, who worked under the so-called London Whale Bruno Iksil, was identifiable in the U.K. Financial Conduct Authority’s 138 million-pound ($182 million) settlement with the bank, despite its attempts to keep his name anonymous, Judge Timothy Herrington said in a ruling handed down July 7. The bank was fined more than $1 billion by global regulators in 2013 after Iksil incurred $6.2 billion in losses.

“The matters included in the decision notice identified Mr. Grout in the relevant sense and manner,” Herrington said in his ruling. "Certain of those matters are prejudicial to Mr. Grout and the preliminary issue is decided in his favor."

Grout is the latest banker to win a suit against the FCA over improper identification in settlements. The regulator lost a landmark appeal last year in relation to a colleague of Grout’s, Achilles Macris, who managed Iksil at JPMorgan. The FCA will take the case to the Supreme Court in October.

‘Sense of Injustice’

While Grout can now challenge the allegations made against him in the FCA’s notice, his case has been put on hold until the Supreme Court rules on the Macris appeal, according to the judgment.

“Mr. Grout and his legal team remain unable to understand how the FCA navigated a path from the evidence Mr. Grout gave, towards the critical conclusions that it reached of him as one of ‘the traders,”’ his lawyer, Graham Huntley at Signature Litigation, said in a statement. “It compounds Mr. Grout’s sense of injustice.”

Former Deutsche Bank AG trader Christian Bittar was successful in November in his suit against the FCA over its failure to properly hide his identity in its sanction notice against the German bank on Libor.

The FCA is obliged to give a person the chance to respond to allegations before publishing a settlement notice if they’re identifiable. To avoid doing this, which could result in significant delays to notices being issued, the FCA uses monikers such as "Trader A" to try to hide their identities.

Spokespeople for the FCA and JPMorgan declined to comment on the ruling.

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