Ex-JPMorgan trader challenges ‘whale’ findings
A former JPMorgan Chase trader who faces US criminal charges in the wake of the $6bn “London whale” debacle is challenging civil findings made against the bank by the UK financial watchdog.
Julien Grout, a French national who worked as a junior credit-derivatives trader at the time of the $6bn loss that rocked the bank in 2012, has filed an appeal with a London tribunal taking issue with the UK Financial Conduct Authority’s findings against JPMorgan that were part of the bank’s $1bn settlement with US and UK authorities last year, according to tribunal records.
While the substance of his challenge is not public, people familiar with the situation told the Financial Times that Mr Grout is alleging that he is readily identifiable in findings that are meant to be anonymous.
His tribunal challenge follows similar ones made by his former colleagues Achilles Macris and Javier Martin-Artajo. Mr Macris succeded in securing a hearing on the matter next year, while the tribunal is still deliberating over whether Mr Martin-Artajo should be allowed to have more time to challenge the findings.
Mr Martin-Artajo managed Bruno Iksil, the trader dubbed the whale; Mr Grout was a junior trader in the same team. Mr Macris ran the London office of the bank’s chief investment office.
If Mr Grout succeeds persuading the tribunal to hear his challenge – the FCA would have to turn over to him all the evidence it relied upon in fining JPMorgan £138m.
As Mr Grout, who remains in France, is alleged to be a fugitive from justice by US authorities in his parallel criminal case, the US authorities have argued that they should be able to limit the amount of documents they turn over to him as part of the pre-trial disclosure process, court documents show.
Mr Grout denies he is a fugitive, arguing he was already in France when the US accused him of falsifying bank records by artificially inflating the value of derivative trades to avoid losses. He is charged with conspiracy, keeping false books and records, wire fraud and making false filings with the US Securities and Exchange Commission. He denies wrongdoing and has not had an opportunity to formally enter a plea.
Mr Iksil avoided criminal charges by striking an immunity deal with US prosecutors last year in exchange for his co-operation.
Mr Grout is also attempting to challenge the FCA through judicial-review proceedings over its decision to stay regulatory findings against him personally in the wake of the US investigation. A hearing to determine whether the challenge can take place is expected to take place later this summer.
Graham Huntley, a London-based solicitor for Mr Grout, and the FCA declined to comment.