Bruno Iksil Archives

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.

In this article, Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) reviews on the most famous trading frauds ever…

Jerôme Kerviel and Société Générale

In 2008, the French bank Société Générale announced having been defrauded by one of its traders, Jérôme Kerviel whom you might have heard about. This fraud cost Société Générale € 4,9 billion and Jérôme Kerviel was accused by the bank of having held positions up to € 50 billion on financial markets without permission. Jérôme Kerviel, on the other hand, accused the bank of having known about his practices since the beginning and of confronting him about them only because he had lost a lot of money. As a consequence, Société Générale’s share lost nearly half his value when the issue was brought to light and the trial is still ongoing…

JP Morgan and Bruno Iksil: The whale

Bruno Iksil joined JP Morgan Chase in 2005 after a short time at Natixis. This French trader got his nickname because of his risky multi-million-dollar bets on credit default swaps (CDS), insurance contracts designed to protect against a country or company default.

In April 2012, the Wall Street Journal and Bloomberg were alerted by brokers on “huge” and “very risky” positions taken in the credit market. A trader had bet on the good health of American companies and sold, in very large quantities (several tens of billions of dollars), insurance contracts to cover themselves against their bankruptcy.

His bets were all the riskier since the US economy was showing major signs of slowdown. Other investors and banks, attracted by this opportunity, did not hesitate to take Iksil on, which quickly created an untenable situation for JP Morgan. The losses generated by the “whale” positions amounted to 6.2 billion dollars for JP Morgan.

As a result, the bank’s quarterly results were down by 660 million dollars, while its share price fell by 20% on the New York Stock Exchange.

Nick Leeson & the Barings Bank

Nick Leeson was a 28-year-old trader who had made a name for himself at Barings, England’s oldest investment bank. He became the head of the bank’s Singapore subsidiary by making high-risk, speculative bets. Nick Leeson took advantage of a loophole in the bank’s trading system to conceal his financial activities.

Unfortunately, Nick Leeson’s luck ran out and he suffered huge losses. Nick Leeson took advantage of a loophole in the bank’s trading records to hide his losses. With each trade, Nick Leeson hoped to mop up the previous losses to the point of no return. One evening, Leeson placed a trade betting that the Nikkei exchange rate would remain stable overnight. This seemingly low-risk trade turned out to be a disaster as an earthquake in Kobe caused the Nikkei and all Asian markets to collapse.

As a result of the massive losses, management realized that Leeson had been hiding a lot of money, and Barings, which had lost more than a billion dollars, more than twice its capital, went bankrupt.

About the author

The article was written in February 2022 by Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023).

What happened between Bruno Iksil & JP Morgan

What happened between Bruno Iksil & JP Morgan

Bruno Iksil: background of a French trader based in London

Iksil’s activities at JP Morgan

JP Morgan’s losses

Conclusion and aftermath of the affair

Related posts on the SimTrade blog

Useful resources

About the author

Quick review on the most famous trading frauds ever…

Jerôme Kerviel and Société Générale

JP Morgan and Bruno Iksil: The whale

Nick Leeson & the Barings Bank

Related posts on the SimTrade blog

About the author