JP Morgan has given the axe to 3 execs over its $2 billion (again, which our sources have informed us are closer to $100 billion) credit default swap losses.
The 3 scape-goats include Achilles Macris, head of the Chief Investment Office (rather ironic is it not that the man who is responsible for the department that may have brought down JPMChase is named Achilles?), Ina Drew, head of risk-management (sounds like a tough job with a firm that holds over $90 Trillion in derivatives positions), and Javier Martin-Artajo, a managing director on Achilles’ team.
The Great Whale himself, Bruno Iksil has reportedly not been given the axe yet, but is expected to be given a pink slip in the coming days. From the WSJ:
Three high-ranking officers are expected to leave J.P. Morgan Chase & Co. this week, said people familiar with the situation, in the latest fallout from a trading blunder that has cost the bank at least $2 billion.
Those leaving are Ina Drew, who since 2005 has run the risk-management unit that is responsible for the losses; Achilles Macris, who is in charge of the London-based desk that placed the trades; and trader Javier Martin-Artajo, a managing director on Mr. Macris’ team, the people said.
Ms. Drew has offered to resign multiple times and that request will likely be accepted this week, these people said. She is expected to leave as soon as Monday, the people said.
Trader Bruno Michel Iksil, nicknamed the “London Whale” for the big positions he took in credit markets on behalf of the risk-management unit called the chief investment office, is likely to depart as well, but it isn’t yet clear when that will happen, said people familiar with the situation. Mr. Macris, Mr. Martin-Artajo and Mr. Iksil have all been stripped of trading responsibilities, added one of these people. All four executives declined comment through the company.
Ms. Drew initially tried to downplay the issues when the positions came to light in April, said people familiar with the situation, but once the scope of the losses became apparent she offered to resign, said people familiar with the situation.
Our sources have confirmed The Doc’s suspicions that the CIO unit’s massive losses are a result of IR swaps tied to the US 10-year, which have suddenly tightened from 2.3% to 1.8% over the past 2 months.
Our sources have also informed us that The Morgue has already SUSTAINED LOSSES OF OVER $100 BILLION on these positions.
We’ve always known JPM’s nearly $100 Trillion position in derivatives, and specifically its $70 Trillion in IR swaps would eventually take down The Morgue, but it is only too ironic that the leader of the office responsible for the losses is named Achilles.