For a bank lauded for navigating the fallout from the 2008 financial crisis without reporting a loss, the errors are embarrassing, especially given Dimon’s criticism of the so-called Volcker rule to ban proprietary trading by big banks.
Dimon conceded the losses, which could rise by a further $1 billion, were linked to a Wall Street Journal report last month about a London-based trader Bruno Iksil, nicknamed the ‘London Whale’, who, the paper said, amassed an outsized position which hedge funds bet against.
Iksil, who graduated in engineering from the Ecole Centrale in Paris in 1991, was not available for comment. The Frenchman, and the Chief Investment Office (CIO) where he works, are known by rival credit traders for taking extremely large positions.
A friend and former JPMorgan colleague said Iksil and his team were not involved in so-called prop trading, where a bank makes bets with its own money, and its activities were known about at the highest levels.
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