Convictions Prove Elusive in ‘London Whale’ Trading Case

Alan PenhallowConvictions Prove Elusive in ‘London Whale’ Trading Case by Alan Penhallow

Last week, the New York Times reported that Britain’s Financial Conduct Authority took the unusual step of announcing that it was dropping its investigation and would take no further action against Bruno Iksil, whose complex derivative contracts ended up costing JPMorgan Chase $6.2 billion in losses. Mr. Iksil faces no charges. He does not even face civil claims, which have a much lower standard of proof. Preet Bharara, the United States attorney in Manhattan, disclosed in August 2013 that the government had entered into a non-prosecution agreement with Mr. Iksil, and that he would not be required to plead guilty to any crime. The Securities and Exchange Commission took no action against him. And now British regulators have dropped the case.

“It’s laughable, really, that so many banks have been prosecuted and it’s always the fault of a rogue trader, or an isolated trading desk,” said Brandon L. Garrett, a law professor at the University of Virginia and author of the book “Too Big to Jail.” ”But when risky behaviour is repeatedly tolerated or concealed, you have to wonder if higher-ranking people should have been targeted.”