Former J.P. Morgan Banker Loses Argument in 'London Whale' Case

By Margot Patrick 

LONDON--Former J.P. Morgan Chase & Co. executive Achilles Macris lost a final argument Wednesday over whether the U.K. financial regulator identified him in an enforcement notice over the 2012 "London whale" trading debacle.

The Supreme Court ruled that Mr. Macris wasn't identified by the Financial Conduct Authority in a 2013 action, overturning two earlier rulings in favor of Mr. Macris's claim that references in the notice clearly referred to him.

The decision means several similar suits against the FCA over the identity of traders and executives in enforcement notices are now likely to be abandoned, lawyers said.

J.P. Morgan was fined GBP137.6 million by the FCA in 2013 and the actions of executives in its London-based Chief Investment Office were described in a public enforcement notice. Mr. Macris, the head of the unit, argued that he could be identified by terms such as "CIO London management," without having been given the chance to give his version of events.

Supreme Court Justice Jonathan Sumption disagreed that "CIO" or "CIO management" would be construed to mean Mr. Macris or even an individual.

"The real question is whether the terms of the notice itself would have conveyed to a reasonable member of the public without extrinsic information that any of these terms was a synonym for Mr. Macris. Plainly it would not," Justice Sumption wrote in the ruling.

Mr. Macris in a statement said he was "naturally disappointed" and that the FCA had won its case on a technical interpretation. "Although the Supreme Court has ruled that I was not identified, the reality is that the FCA's Final Notice to J.P. Morgan made findings about my conduct which the FCA had to retract," he said.

An FCA spokesman said it is pleased with the decision and is now considering what it means for other cases involving so-called third-party rights. The FCA has to give parties the right to respond if they are identified in an enforcement action.

J.P. Morgan paid nearly $1 billion to U.S. and U.K. authorities in 2013 and admitted wrongdoing over $6.2 billion in trading losses in the CIO.

The FCA fined Mr. Macris more than $1 million last year for failing to be open with authorities about the trades. Mr. Macris at the time said he agreed to the fine since the FCA didn't accuse him of deliberately misleading authorities and he wanted to end a "drawn-out and burdensome process."

Write to Margot Patrick at [e-mail]

(END) Dow Jones Newswires

March 22, 2017 10:38 ET (14:38 GMT)

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