A U.S. district court judge has approved a settlement reached at the end of last year between JPMorgan Chase & Co. (JPM) and pension funds related to trades made by Bruno Iksil, who earned the nickname “London Whale” because of his huge market-moving positions in credit derivatives. In their class action securities case, the plaintiffs accused the firm of using its chief investment office in London as a secret hedge fund and hiding up to $6.2M in losses.
Even though the office was supposed to be primarily for managing risk, the plaintiffs believe that it was making high-risk trades for profit, including trading in complex credit derivatives. Depositors’ money was purportedly used in secret for making certain trades. Shareholders claim that JPMorgan knew about the increased risks it was taking and hiding them.
JPMorgan has not admitted to wrongdoing by settling this deal. However, it was also fined over $1B by regulators in the U.K. and the U.S. for management deficiencies related to the London Whale scandal.
Iksil has not been criminally charged. He has agreed to work with the U.S. in its probe into the trading scandal. Earlier this year, in a letter to Bloomberg News, Iksil claimed that managers at the London office told him on more than one occasion to push forward with the trading strategy that garnered him the infamous moniker. He also said that he feels that the nickname is unwarranted.
Anyone who purchased JPMorgan stock from 4/13/12 to 5/21/12 is covered under this settlement. The lead plaintiffs include pension funds in Oregon, Ohio, Arkansas, and in Sweden.
Contact our pension fund fraud law firm today if you suspect that your losses are due to fraud or negligence. The SSEK Partners Group represents investors throughout the U.S.
$150M ‘London Whale’ Settlement Gets Judge’s OK, Law360, May 10, 2016