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Morning Coffee: Jason Hughes and the nightmare of working with arrogant traders

Yesterday's SEC statement on the JPMorgan London Whale affair, along with the related $920m fine, has left few people involved with the matter looking good.

Jamie Dimon, in particular, looks a little dubious. Although Dimon isn't mentioned by name, the SEC's report makes more than 100 references to 'senior management', with senior management defined as - 'the JPMorgan Chief Executive Officer, the JPMorgan Chief Financial Officer, the JPMorgan Chief Risk Officer, the JPMorgan Controller, and the JPMorgan General Auditor.' As the Financial Times points out, Dimon quickly dispensed with three of the five people who were in these senior management positions at the time of the trading loss - the only 'senior managers' from that time who remain in place now are himself and Lauren Tyler, then general auditor. Dimon has hung on despite the fact that the SEC accused JPMorgan's senior management of deliberately depriving its own board of information and the bank of misleading its regulators.

One man does, however, emerge from the London Whale affair looking worthy of pity at the very least. Jason Hughes, product controller in JPMorgan's chief investment office (CIO), amply illustrates the nightmare of working with arrogant traders.

Hughes hasn't been apportioned any blame by the SEC and isn't mentioned by name in its report. However, regulators pointed out that JPMorgan only had one man checking traders' estimates for their profits and losses in the CIO. That man was Hughes. The Wall Street Journal says that Hughes alone was responsible for checking 132 trading positions, many of them complex derivative positions which were difficult to value.

The Journal says traders took full advantage of Hughes' workload and middle office status. Hughes reportedly asked trader Julien Grout why he'd started to value his trades more favourably and Grout told him to, "talk to management." When Hughes asked senior trader Xavier Martin-Artajo about unusual valuations for his trades, Martin-Artajo reportedly told him that he didn't use generally accepted accounting principles. “I’m a trader. I do not mark the books to U.S. GAAP. My job is to manage risk,” Martin-Artajo said according to an indictment from the U.S. Justice Department.

Jason Hughes' current whereabouts is unknown (get in touch at if you are Jason or know of him). The FCA Register shows one Jason Hughes, who spent four years working for JP Morgan, but who left in 2006 and hasn't re-registered since.

JPMorgan is trying to make amends for the understaffing in its control division. It's hired 3,000 people across all control functions so far this year.


Jamie Dimon’s daughter is a far better writer than him. (NYMag)

JPMorgan is the top bank in commodities. (Bloomberg)

Simon Warshaw – a banker who’d spent 27 years with UBS and joined via the graduate programme, is leaving. (Financial News)

Warshaw recently made a lot of money on the Vodafone Verizon deal. (Independent)

Warshaw's move had been expected ever since Andrea Orcel moved him out of a management role last year. (Financial Times)

37 year old Goldman Sachs managing director arraigned on rape charge. (Bloomberg)

The Bank of England’s supervisor for Standard Chartered has been poached by Standard Chartered. (The Times)

Harvard Business Review’s giant interview with Alex Ferguson. (HBR)

Beware the scarring effects of over-education. (

"Before you sign on investment banks treat you like a star. Then your job starts and you're one of many.” (Guardian)

AUTHORSarah Butcher Global Editor

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