London Whale Fine 792900 GBP

London Whale Fine £792,900.

Yesterday, the Financial Conduct Authority (FCA) fined Achilles Macris £792,900.

Mr Macris was fined because he was not open and cooperative with the regulator. We do not propose to go into detail in this article on the technicalities of the case but in simplistic terms we will explain the following:

Mr Macris was Head of CIO International for JPMorgan Chase Bank London

He oversaw a number of portfolio funds, one of these was the Synthetic Credit Portfolio

This portfolio got into difficulty with huge losses in 2012

When interviewed by the regulator Mr Macris did confirm that there were significant losses of $200 million but suggested after rebalancing that the portfolio did not need additional action

In reality, further action was required and the regulator felt that Mr Macris had not been open and cooperative. These losses became known as the “London Whale”.

Comment

Clearly, we are not party to any of the discussions or investigations between the parties but for the regulator to initially award a fine of over £1.1 million which has been discounted for early agreement to just under £800,000 on an individual, it has been taken very seriously and a clear message is being sent out to other fund groups and ‘high consumer impact’ operations.

As ever, the balance of risk versus reward affects us all, whether we are making multi-million pound decisions at fund manager level or whether you are making decisions about the level of risk you want for your individual pension, investment, ISA or even child savings plan.

We have a saying at this firm: “you can only con a greedy person”. Do not be greedy, do not take risks that you cannot afford to take.