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There are many criminal charges coming down the pipeline of J.P. Morgan Chase’s so-called “London Whale” $6 billion trading fiasco, but the Justice Department will apparently not be prosecuting the cetacean at the center of the mess. In looks as if Bruno Iksil, the whale in question, who received his moniker from the massive size of his trades that did more than merely ripple the market, will avoid criminal charges through the very-well established precedent of cooperating with federal authorities as a witness.
This tactic is not as scandalous in the world of rogue traders as it is in the conventional criminal underworld, where selling out is quite damaging to one’s reputation. By not going after Iksil, the JD presumably thinks it will uncover more widespread rot and corruption, clearly not buying J.P. Morgan’s claim that senior executives weren’t involved and that the 2012 losses were the result of the actions of a small group of traders. And yet what does it say about the prosecutorial strategy when going after the big fish means releasing the whale?
The team leader, Javier Martin-Artajo, has seriously lawyered up. He is far from the being the catch of the day, and so won’t be offered the sweet deals. The Securities and Exchange Commission for its part wants J.P. Morgan to admit some degree of wrongdoing. But the SEC has its job cut out for it, and is also in the same business of trying desperately to localize the damage. The basic case is actually quite simple no matter the pretzel-like complexity of the trading. London traders are certainly not strangers to it. The question is one of losses: Were they concealed? Is there evidence of mis-valuation? Falsifying data and hiding negative results is typically what happens when extreme risk-takers find that their gambles have gone bust.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]