JP Morgan prop trading chief quits

JP MORGAN has suffered a blow as its head of proprietary trading has decided to quit to set up a hedge fund.

In response to regulatory pressures that will outlaw most US banks’ prop trading activities – that is, bets with their own cash rather than clients’ – it is understood that Mike Stewart is leaving to set up a hedge fund. The asset manager, to be called Whard Stewart, will focus on emerging markets.

The bank fears that some of Stewart’s team from when he headed its emerging markets business could also leave to join the venture.

Stewart is only the latest in a string of high profile departures from Wall Street banks driven by the Volcker rule. City A.M. revealed last month that Goldman Sachs is losing three partners led by Ed Eisler to a similar enterprise.