An investigation of JPMorgan Chase was opened by the U.K.’s finance regulator as to whether traders in London broke any rules related to wrong-way bets on credit derivatives that lost their unit $6.2bn.
Bloomberg reports that The Financial Services Authority said Monday in an e-mailed statement that it’s probing the losses suffered by JPMorgan in the Chief Investment Office, or CIO, at the firm’s London offices. Other agencies already investigating the matter include the U.S. Justice Department and Securities and Exchange Commission.
Bruno Iksil, the U.K. trader nicknamed the London Whale because he was responsible for a trading book large enough to move the market, made a wrong-way bet on credit derivatives that led to the company’s biggest trading loss. At one point, as much as $51bn in shareholder value was erased by the trades.
'The FSA is continuing to conduct a formal enforcement investigation into the trading losses', the regulator said in the statement. 'Conclusions will be reached in the enforcement investigation in due course and any further appropriate action determined at that time'.
Hit the link below to access the complete Bloomberg article:
image: © brydeb