London Whale's Minnow Wages Lonely Identity Fight With FCAby
Court ruling on third-party rights saw most traders drop suits
Grout, involved in London Whale case, still has active appeal
A former JPMorgan Chase & Co. trader involved in the infamous “London Whale” scandal is the only man left standing in a fight with the U.K. markets regulator over how people are identified in penalty notices, after a landmark court ruling saw off at least half a dozen other suits.
Julien Grout is the only person who hasn’t withdrawn his suit over the Financial Conduct Authority’s use of monikers such as “Trader A” for those involved in its probes, a court clerk said by phone Wednesday. Grout won a claim in July that found he was identifiable in the bank’s settlement notice over the so-called London Whale probe.
Grout, whose own attorney once called him a “minnow” in the case, is continuing to fight the FCA’s appeal scheduled for July despite a U.K. Supreme Court judgment in March that strongly sided with the regulator on the issue.
For years, individuals complained about the FCA’s use of aliases in settlement notices. The agency used the nicknames to get around a requirement a person must be given the chance to respond to allegations if they’re identified.
The FCA used the anonymity to illustrate misconduct by publishing chatroom transcripts and events while avoiding any delay in issuing the sanction. But traders argued the agency often didn’t go far enough in disguising them.
Achilles Macris, another former JPMorgan executive in the London Whale case, became the first person to take his case to the U.K.’s top court. In a surprise departure from lower court rulings, Macris lost the case. The Supreme Court said for a person to be identified they must be identifiable by the public at large not just a specific corner of the industry and a synonym must clearly apply to only one person not multiple individuals.
A spokesman for the FCA declined to comment, as did Graham Huntley, a lawyer for Grout.
JPMorgan was fined more than $1 billion by U.S. and U.K. regulators in 2013 after trader Bruno Iksil, nicknamed the London Whale for his large bets, incurred $6.2 billion in losses. Grout worked under Iksil and his manager Macris, who was responsible for JPMorgan’s chief investment office in Europe.
Despite the Supreme Court’s ruling, the FCA’s head of enforcement said in March that the agency is planning to identify traders by name in future company-penalty notices. Mark Steward said the FCA intends to run shorter investigations and reach conclusions on individuals and their employers concurrently, which would avoid any need for anonymity.
Ex-Deutsche Bank AG trader Christian Bittar, JPMorgan’s former London chief currency dealer, Richard Usher, and Citigroup Inc.’s former head of G-10 spot-currency trading, Rohan Ramchandani, were among those who withdrew their FCA suits after the ruling. The men claimed they were identifiable in the regulator’s penalty notices over the manipulation of interest-rate and foreign-exchange rate benchmarks.