What happened between Bruno Iksil & JP Morgan
In this article, Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains how Bruno Iksil, a French trader working in London made inconsiderate trades in the name of the renown JP Morgan.
Bruno Iksil: background of a French trader based in London
Bruno Iksil, known as “The Whale”, is a French trader well known in London financial circles. A former student of Centrale Paris, this former Natixis employee built a reputation at JP Morgan for the size of the orders he placed. Bruno Iksil worked on the Credit Default Swaps (CDS) market, financial products that provide insurance against the non-repayment of loans.
Iksil’s activities at JP Morgan
Bruno Iksil’s reckless trading initially made JP Morgan Chase a lot of money, almost $100 million. His ability to succeed brilliantly in times of crisis and his boldness in business were praised and rewarded on numerous occasions by management, which made Iksil the highest paid trader in London. According to the Wall Street Journal, in recent years Bruno Iksil earned around $100 million a year at JPMorgan’s chief investment office (CIO).
And his nickname, linked to the enormity of the commitments he was making, was regularly on the front page of all the newspapers, along with the new positions taken by ‘The Whale’.
JP Morgan’s losses
Bruno Iksil was suspected of being involved in a colossal loss by JP Morgan Chase. According to the latest estimates, the risky bets of the Frenchman and his colleagues cost JP Morgan Chase 5.8 billion dollars. This triggered a real storm in the life of the trader who, according to the British journalist The Guardian, left the company.
Following the losses incurred by the American bank, Jamie Dimon – the Chief Executive Officer – had announced losses amounting to 2 billion dollars. In fact, nearly 4.4 billion dollars were lost as a result of the Whale’s operations.
Following these announcements, the bank’s market capitalization plunged by 25 billion dollars as the stock dived by 9%.
Conclusion and aftermath of the affair
The whale affair brought to light accusations of negligence against the bank, particularly in its internal controls. The risky positions in credit derivatives that Bruno Iksil and many other banks regularly took contributed to the subprime crisis. As a result, JP Morgan was fined $1 billion by the British and American authorities, on behalf of its management that enable the Whale to invest so much on financial markets.
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Philippe Bernard (13/07/2015) A Londres, Bruno Michel Iksil échappe aux poursuites Le Monde.
About the author
The article was written in March 2022 by Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023).