JPMORGAN CHASE WHALE TRADES: A CASE HISTORY OF DERIVATIVES RISKS AND ABUSES

positions in newly issued credit indices instead of in the IG9, where the SCP already held
massive positions. 579
Yet even there, the SCP’s massive buys attracted market attention.
91
By early April, press speculation about the large trades in the credit markets was
building. On April 4, 2012, Peter Weiland, the head of market risk for the CIO, received a call
from a reporter at the Wall Street Journal indicating that the paper was working on a story about
580
Bruno Iksil and the CIO. The next day, JPMorgan Chase’s head of Corporate
Communications, Joe Evangelisti, sent an email to management describing the upcoming article.
He wrote: “[T]hey are saying that Iksil currently has more than $200 billion in positions in credit
trading products and has made JPM more than $600 million in profits over the past two
years.” 581
On April 6, 2012, both Bloomberg and the Wall Street Journal ran articles on Mr. Iksil’s
trading. The Bloomberg story, entitled “JPMorgan Trader’s Positions Said to Distort Credit
Indexes,” began:
“A JPMorgan Chase & Co. (JPM) trader of derivatives linked to the financial
health of corporations has amassed positions so large that he’s driving price
moves in the $10 trillion market, traders outside the firm said.” 582
Identifying Mr. Iksil, the article cited investors as complaining that his trades “may be distorting
prices, affecting bondholders who use the instruments to hedge hundreds of billions of dollars of
583
fixed-income holdings.” More specifically, according to the article, two hedge-fund traders
said they had seen “unusually large price swings when they were told by dealers that Iksil was in
the market. At least some traders refer to Iksil as ‘the London Whale.’” 584 The article also said
the size of the position could have been as large as $100 billion. 585
The Wall Street Journal article, entitled “London Whale Rattles Debt Market,” told a
586
similar tale. The article stated:
“[In] recent weeks, hedge funds and other investors have been puzzled by unusual
movements in some credit markets, and have been buzzing about the identity of a
deep-pocketed trader dubbed ‘the London Whale.’ That trader, according to
people familiar with the matter, is a low-profile, French-born J.P. Morgan Chase
& Co. employee named Bruno Michel Iksil. Mr. Iksil has taken large positions
579
Subcommittee briefing by JPMorgan Chase (8/15/2012) (stated by Jeanette Boot); JPMorgan Chase Task Force
interview of Bruno Iksil, CIO (8/27/2012) (partial read out).
580
4/4/2012 email from Peter Weiland, CIO, to Irvin Goldman, CIO, “Call,” JPM-CIO-PSI-H 0002093.
581
4/5/2012 email from Joseph Evangelisti, JPMorgan Chase, to Ina Drew, CIO, Douglas Braunstein, JPMorgan
Chase, and others, “WSJ/Bloomberg CIO stories,” JPM-CIO-PSI 0018414.
582
“JPMorgan Trader’s Positions Said to Distort Credit Indexes,” Bloomberg , Stephanie Ruhle, Bradley Keoun,
and Mary Childs, (4/6/2012), http://www.bloomberg.com/news/2012-04-05/jpmorgan-trader-iksil-s-heft-is-said-todistort-credit-indexes.html.
583
Id.
584
Id.
585
Id.
586
“London Whale Rattles Debt Market,” Wall Street Journal, Gregory Zuckerman and Katy Burne, (4/6/2012),
http://online.wsj.com/article/SB10001424052702303299604577326031119412436.html.