Sun, May 13, 2012 - Page 11 News List

‘London Whale’ amassed big bets below the surface

Reuters, LONDON and PARIS

Bruno Iksil was dubbed the “London Whale” in credit markets due to the size of the trading positions he took, but for years he stayed well below the surface avoiding detection.

Now, the French-born JPMorgan trader has been dragged from the anonymity of the trading floor into the eye of a very public storm over a US$2 billion trading loss at the US investment bank where Iksil worked in a little-known group called the Chief Investment Office (CIO).

Friends, colleagues and fellow traders describe an unassuming man, a far cry from the brash image normally associated with traders staking huge bets in fast-moving financial markets, including derivatives.

“He’s a really nice bloke. A quiet bloke. He’s not an arrogant trader, he’s quite the opposite. He’s very charming,” one former colleague at JPMorgan said of Iksil, who he said was married with “a couple of kids.”

Iksil, who graduated in engineering in 1991 from the Ecole Centrale in Paris, looks older than he is, seldom wears a suit, and according to ex-colleagues lives outside central London.

“He’s a balding chap with gray and dark hair. I’d say he’s in his 40s,” the ex-colleague said, adding that there were not many young traders in CIO, a relatively isolated group where everybody was in their thirties and forties.

“Nobody wears suits in CIO. You don’t meet clients face to face,” he added.

There have been no suggestions that Iksil’s activities were in any way irregular, but over a period of years he and his team amassed a book of bets estimated by some to be worth US$100 billion.

When these became public, opportunistic hedge funds could not resist trading against the “Whale.”

As markets moved against him, whispers of Iksil’s enormous latent losses circulated, ultimately undermining JPMorgan’s reputation as the canniest risk-manager in global finance.

For all the talk of the “Whale,” the handful of London-based bankers and traders who have done business with him say they know little about the man behind the trades.

“Everyone knows the ‘Whale,’ whenever there was a big move in CDS [credit default swap] markets, you knew it was the ‘Whale,’” one hedge fund manager said, adding that Iksil managed to maintain “a very low-profile” out of kilter with his big influence on the multitrillion-dollar CDS market.

The trader’s friends were upset with Iksil being thrust into the limelight.

“I am not happy with the way Bruno has been singled out. His name has been mentioned because in the last few years — 2008, 2009, 2010 — he delivered excellent results for the bank,” a friend who was also a former colleague said.

“His understanding of the markets, his technical skill, mean he has become someone with real credibility. Although he is in some ways in the center of the world, at JPMorgan in London, he is pretty detached and does not have a culture of money,” he added.

Iksil, who did not return calls or e-mails, is a member of London’s thriving French expatriate community, estimated at 350,000 people, which includes a large contingent of professionals involved in banking.

Senior traders and dealers described Iksil as a “bright guy”, who was faithfully executing strategies demanded by the bank’s risk management model, but who may have simply misjudged the amount of liquidity in the markets.

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