JP Morgan disclosed that it filed an October 22, 2012 lawsuit in the U.K. against Javier Martin-Artajo, the former supervisor of trader Bruno Iksil. Mr. Iskil, nicknamed the “London Whale,” is allegedly responsible for the trades in JP Morgan’s chief investment division that resulted in losses in excess of $6.2 billion for the bank. The matter is pending in the High Court of Justice, Queen’s Bench Division.
JPMorgan previously admitted to “egregious” failures in failing to manage its positions on synthetic credit securities. Both Iskil and Martin-Artajo are no longer employed by the bank.
JPMorgan’s internal investigation determined that Martin-Artajo encouraged Iksil to place artificially higher values on trades than what would have been received on the market. As a result of these trading losses, the bank is facing regulatory scrutiny and criminal probes as well as civil lawsuits from investors. (“London Whale’s Boss Martin-Artajo Sued by JPMorgan,” Bloomberg, October 31, 2012).