A landmark case with potentially far-reaching consequences on what the financial regulator is able to publish in enforcement cases is set to be heard before the UK’s highest court next month.
The Supreme Court appeal by the Financial Conduct Authority centres on whether Achilles Macris, who was chief investment officer of the synthetic credit portfolio team at JPMorgan, was improperly identified by the FCA when it fined the bank £138m over the Whale debacle in 2013.
Mr Macris was in charge of JPMorgan’s London Whale, a nickname given by rival traders based on the large debt-market trades at the bank. He oversaw Bruno Iksil, the trader at the heart of the scandal that cost the US bank $1bn in penalties, including the FCA fine.
Mr Macris claims that the FCA findings improperly identified him as “CIO London management” and accused him of deliberately misleading the regulator. He was unable to give his account of events, he argues.
FCA final notices are not intended to identify individuals because they may face future criminal prosecutions before a jury. But often the FCA’s findings are detailed and include emails from traders or messages from electronic chat rooms, which are linked to certain bankers by the media.
Those individuals identified by the FCA are meant to be given the right to make representations — and can also be given certain evidence — before a final notice is published.
Mr Macris argues that he should have been consulted before the FCA report detailing the wrongdoing was published because even though he was not mentioned by name, his identity could be ascertained.
He argued that there were references to a part of the bank’s management structure that identified him and he should have been given the right to make representations.
The Upper Tribunal and Court of Appeal have both held Mr Macris was identified by the notices.
Athens-based Mr Macris was fined £792,000 by the FCA earlier this year for failing to inform it about concerns over the credit derivatives division he headed, where trades ultimately led to huge losses in 2012. The regulator said there was no deliberate dishonesty on the part of Mr Macris.
If the Supreme Court upholds the earlier decisions about identifying Mr Macris it could mean that the FCA has to be more cautious about the detailed information it can publish in future rulings.
The FCA appeal is being closely watched because at least four other traders — caught up in regulatory probes including the Libor and foreign exchange rigging probe — have filed similar legal challenges over their alleged identification in decision notices.