Supreme Court decides in favour of Financial Conduct Authority after banker argued his identification was wrongly made public in London Whale scandal

Hayley Kirton
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The City watchdog fined JP Morgan over the London Whale fiasco (Source: Getty)

The Supreme Court today ruled in favour of the City watchdog after a former JP Morgan exec argued the regulator wrongly allowed him to be identified in notices it issued linked to the London Whale scandal.

Achilles Macris, who was responsible for significant portfolios at the bank when its London Whale trade positions caused it to lose $6.2bn (£5bn), argued the Financial Conduct Authority (FCA) wrongly exposed his identity in the process of reprimanding his ex-employer.

Macris contended that, because he could be identified from the details in the FCA's notices, he had the right to respond to the watchdog before it made its decision public.

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Although the notices issued did not explicitly call Macris out by name, they made several references to Chief Investment Office London management. At the time, the former exec was international investment chief of JP Morgan Chase Bank and head of the bank's Chief Investment Office.

Lord Sumption, who delivered the lead judgment in the Supreme Court decision, sided with the FCA, stating the phrasing used could have applied to more than one person at the investment bank.

A tribunal originally found in the banker's favour and that decision was upheld by the Court of Appeal in May 2015. The case was heard by the Supreme Court last October.

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"The FCA is pleased there is now a final ruling on the issue and is considering the impact of the Supreme Court's judgment on the other third party references currently before the tribunal," an FCA spokesperson said.

The FCA fined JP Morgan £137.6m for the London Whale saga in 2013, having decided the billions of losses could be at least partly blamed on high-risk trading strategies, weak management and failure to react when information emerged that should have highlighted problems to the lender.

Hannah Laming, partner at Peters & Peters, commented: "This will be a disappointing decision for some. It will do little to check the perceived tendency on the part of the regulator and firms to reach swift settlements in which the underlying facts are not subject to rigorous challenge, at the expense of procedural rights for individuals caught up in regulatory investigations."

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But, David McCluskey, partner in the corporate crime and fraud group at Taylor Wessing, added:

The judgment will be seen by many as bringing a measure of clarity to the issue, though of course it will still be open to individuals to apply on the basis that in the particular facts of the case they have been identified. The more widely the details of the case are publicised, the higher that risk must be.

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