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'London Whale' Could Sink J.P. Morgan…Again

For months, pundits have wondered what Bruno Iksil, the former J.P. Morgan trader whose oversized derivatives bets cost the bank $6.2 billion, was doing with his life. We now have a partial answer: He’s been helping federal authorities shape their case against the bank and his former colleagues.

Investigators are looking into whether J.P. Morgan traders knowingly misvalued their positions in order to hide the magnitude of the “London Whale” trading losses. Iksil, it seems, is their white knight. He has reportedly handed over evidence proving that he warned others of the losses and urged his bosses to come clean to upper management about the depth of the bad bets. In exchange for his cooperation, Iksil won’t face criminal or civil charges.

Instead, Javier Martin-Artajo, the manager who oversaw his trading strategy, and Julien Grout, a low-level trader who marked his books, will likely face the fire. The New York Times reported that the two could be charged as soon as this week. The bank, meanwhile, faces fines and charges that could force executives to publicly admit to wrongdoing for the firm’s lack of control, leaving open the possibility J.P. Morgan could face litigation from investors.

Lesson learned: If you lose $6 billion, fess up. It won’t be that bad.

Private Banks Vie for Top Talent (eFinancialCareers)

Private banking jobs are in big demand and firms, including big banks like Morgan Stanley and Deutsche as well as boutiques like Raymond James, are hiring and poaching talent as competition heats up and consolidation looms. But the once-cushy career is now extremely demanding.

Resigned (WSJ)

Activist investor Bill Ackman has resigned from the board of J.C. Penney, ending a highly-public spat with the retail company and its directors. Ackman, who seems to rather enjoy front-page confrontations, had been calling for the jobs of J.C. Penney’s CEO and chairman, among other things.

New MD (Daily Finance)

Citi has hired former Goldman Sachs exec David Tenney as a managing director and regional head of sales for the Americas at its prime brokerage unit.

Hedge Fund Launch (Bloomberg)

Three former managing directors at Goldman Sachs will launch an Asian-focused multi-strategy hedge fund next year. The firm, Golvis Investment, will be based in Singapore.

Closed for Business (NY Times)

Facing insider trading charges and a wave of client redemptions, SAC Capital has shuttered one of its stock trading units. Anil Stevens, one of the co-heads of the unit, is reportedly prepping his own fund, taking eight of the group’s nine employees with him.

Lot of Pennies (Bloomberg)

Investigators have arrested as many as nine people in connection with a $140 million international penny stock fraud.

Promotion (Financial News)

Stefan Bollinger has been named the new co-head of Goldman Sachs’ pension and insurance strategy group. Bollinger is currently head of Asia Pacific corporate sales and co-head of private wealth within Goldman’s securities division.

Buzz Around the Office

Pass the Nachos (MSN)

Finally a good excuse not to go to the gym. A new study found that 63% of gym equipment is covered with the bug that develops into the common cold.

List of the Day: First Job

If you’re just starting out, here are a few common mistakes you should actively avoid.

  1. Not asking for help.
  2. Thinking you’re too small to matter.
  3. Avoiding social activities with coworkers.

(Source: The Daily Muse)

AUTHORBeecher Tuttle US Editor

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