- French-born, British-based Bruno Michel Iksil believed to be responsible
- Dubbed the 'London Whale', be bragged 'he could walk on water'
- Believed to be part of Chief Investment Office at heart of bank's losses
- Ina Drew, boss of CIO, was paid $14million last year
- Shares in British banks fall: Barclays, RBS and Lloyds all hit
By Christian Gysin
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A London based trader - nicknamed ‘Voldemort’ - was yesterday thought to responsible for a huge trading loss for the investment bank JP Morgan.
Bruno Michel Iksil was named by the Washington Post as the man behind a staggering £1.2 billion loss.
The ‘black hole’ was revealed during the bank’s second quarter amid fears his trades could cost the bank a further £750 million in the coming months.
Speculation: A London-based trader, dubbed Voldemort after Harry Potter's nemesis played by actor Ralph Fiennes in the films, is thought to be behind a $2billion loss for America's largest bank
Speculation is mounting that a British-based trader dubbed 'Voldemort' is behind a $2billion loss for America's JPMorgan bank
Yesterday it emerged that Mr Iksil works in JP Morgan’s Chief Investment Office ( CIO) where his job was reportedly supposed to oversee mitigating risk.
Iksil reports to boss Ina Drew, who is one of Wall Street’s most powerful women , who last year collected a £10 million pay packet.
However bank CEO Jamie Dimon yesterday issued a statement claiming that the bank had hit trouble as he said: ‘ In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored.
TRADERS WHO BET THEIR BANKS... AND LOST
U.S. bank Allfirst currency trader John Rusnack pleaded guilty to $691million fraud in 2002 - and was jailed for seven-and-a-half years.
Toshihide Iguchi, a former car dealer, lost more than $1billion at Japanese bank Daiwa in fraudulent trading over an 11-year period from 1984 onwards.
The Bank of Credit and Commerce International (BCCI) was seized by regulators in 1991 after auditors reported huge losses from illegal loans to corporate insiders and trades. It collapsed with $16billion debts and 250,000 savers lost money.
Japan's Sumitomo Corporation trader Yasuo Hamanaka lost his firm $2.6billion in unrecorded copper market trades and was jailed for eight years in 1996.
British trader Nick Leeson single-handedly destroyed 233-year-old Barings Bank in 1995 by making losses and setting up a secret account to hide them. He was jailed for six-and-a-half years.
‘The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought. There are many errors, sloppiness and bad judgment.
‘It puts egg on our face and we deserve any criticism we get.’ The Daily Mail has learned that French-born Mr Iksil , who is a father of four in his mid Forties, has been living and working in London for the past seven years.
In his Blooomberg trading profile he talks of being able to ‘walk on water’ being ‘humble’ but in the City he has been nicknamed ‘Lord Voldemort ‘ - after Harry Potter’s nemesis - along with the names ‘London Whale’ and ‘White Whale.’
He was given the ‘Voldemort’ nickname because he was seen as such a ‘scary and powerful’ force in the City.
One trader explained: ‘It was a play on the Harry Potter theme when people were frightened of Lord Voldemort and his powers and referred to him as ‘’He Who Must Not Be Named.’’ ‘
In reality , according to friends and family, Mr Iksil is not a ‘larger than life figure.’ He rents a flat in Earls Court, West London, where he stays from Monday until Thursday.
He then returns to Paris for a long weekend where he spends time with his wife Karen and the couple’s four children.
Last night his sister - 41-year-old Sandrine Iksil - who lives in Leicester and works for a software company in Leamington Spa, Warwickshire, told the Daily Mail: ‘ Bruno rarely talks about his work and if you met him you would not think he is a trader in the City.
News: The company's stock plunged almost 7 per cent in after-hours trading after the loss was announced. Other bank stocks, including Citigroup and Bank of America, suffered heavy losses as well (file picture)
‘He is very quiet and is a family man. He does not own a flash sports car and his main hobby would be cooking. He enjoys being in the kitchen. He certainly has never talked to me about his work.
‘He also insists on getting home each weekend to be with his wife and children. ‘ He works from home on Fridays.
‘I last saw him at Easter when he came to visit with his wife and children. They are just a normal family.’ The Daily Mail has learned that Mr Iksil’s family originally hails from Russia before his ancestors settled in France.
VOLDEMORT'S BOSS PAID $14M
The boss of the British-based trader responsible for JPMorgan's $2billion losses was herself paid $14million last year.
Ina Drew, 54, has been in charge of the London-based Chief Investment Office since February 2005.
Regarded as a key lieutenant of chief executive Jamie Dimon, she was effectively in charge of Bruno Michel Iksil.< br />
She received a cash bonus of $4.7m, a share award of $7.1m, options worth $1.5 million and a base salary of $750,000, according to regulatory filings by the bank.
The dark haired trader is reported to have earned has earned about $100 million a year for JP Morgan’s Chief Investment Office in recent years.
Iksil joined JP Morgan in 2005 having previously worked at the French investment bank Natixis ( KN) (correct) from 1999 to 2003.
He originally graduated in engineering from the Ecole Centrale in Paris.
JP Morgan said yesterday they had informed the UK’s Financial Services Authority (FSA) of their situation.
Iksil was brought into the CIO unit to head its credit desk where trades were vetted by management.
The losses are an acute embarrassment for Mr Dimon after JP Morgan was considered in a healthy enough position to take over investment bank Bear Stearns and consumer bank Washington Mutual when they collapsed in 2008.
In April when the issue was first raised in financial papers and websites Mr Dimon dismissed the matter as a ‘temp est in a teapot.’ Mr Dimon himself earned a staggering £15 million last year and has publicly opposed new regulations being placed on banks.
Last night JP Morgan’s position was made more uncomfortable by what those in the city called the ‘Volcker’ effect.
Former US Federal Reserve chairman Paul Volcker - and Bank of England Governor Sir Mervyn King - both claimed that investment banks should not be allowed to trade on their own accounts.
Bad news: The trading loss is an embarrassment for a bank that came through the 2008 financial crisis in much better health than its peers. It kept clear of risky investments that hurt many other banks (file picture)
Trying: JPMorgan wants to unload the portfolio in question in a 'responsible' manner to minimise the cost to its shareholders. Analysts said more losses were possible depending on market conditions (file picture)
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- Darren, USA - May I suggest that you look up what derivatives are before you bleat ? Derivatives have been with us for more than 2,000 years when farmers pre-sold their crops (futures). The troubles began when US-invented, weird and wonderful derivatives appeared, e.g. CDOs and CDSs ! As for Barings, it was a pure lack of over-sight, allowing one man to destroy an ancient and honourable bank.
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I know I shouldn't smile, but I do get a perverse sense of satisfaction over a Banker making a loss! Let us hope that it will only affect their next-years bonuses, and not their customers, but I doubt it!
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Watch banks and city traders go the way drug dealers went. It will soon be like prescription only banking. You will have dodgy looking people coming up to you on street corners, and saying "psst, want to buy some shares, i can get you derivitives too" When they get caught, the judge will be sending them down for six, and telling them they are taking advantage of societies weakest, the people who have lost the most from their income, and are desperate to make it back, the judge will be saying its our society you are destroying, you and your type are low life, and need to be kept away from decent people, you ruin lifes, and to your victims, i would just tell them, say no to shares and derivitives, just say no.
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The British taxpayer bailing out an AMERICAN bank? I don't think so. Calm down. - John S, Bromley, 11/5/2012 18:59 - Good comment, John, but don't be too sure - the godforsaken Kraft was in financial doldrums until 'Father Christmas' Brown arranged a several £billion loan, and Cadbury's thrown in for 'good measure'. It's interesting to speculate whether Kraft wouldn't have been helped so favourably by anyone else by 'Father Christmas' / British Banks. .
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Utter rubbish, this is due to commodity manipulation. They got court short on their silver futures position. More crime from the banksters, and as ever it was at the London branch. No need to worry as they will still get their bonus and the tax payer will pick up the bill.
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God when will the unregulated stupidity ever stop!I suppose the taxpayer will pick up the bill again? NO!! - David, Jersey, 11/5/2012 18:31 The British taxpayer bailing out an AMERICAN bank? I don't think so. Calm down.
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Every single financial crisis of the past 20 years - Barings, Long Term Capital -seems to come back to derivatives. Whatever benefit they bring cannot possibly be worth the disasters they repeatedly inflict on the global economy.
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Tossa's
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God when will the unregulated stupidity ever stop!I suppose the taxpayer will pick up the bill again? NO!!
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I thought Banks had internal controls to [revent this sort of activity - something wrong with management here - who "appointed" this guy to his job position and who authoized his trading limits.and for that matter who was overseeing his activities. Seems to heads need to roll real fast.
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