Why Don't We Know More About the London Whale? (Atlantic Wire)

Why Don't We Know More About the …

Perhaps the most surprising thing about a man who was able to move trillion dollar markets in a single bet, is that we know so little about him. Especially when everyone has known what he was up to for weeks.
RELATED: What Color Will Jamie Dimon's Parachute Be?

Brunio Iksil's name first started to show up on newswires almost exactly a month ago, when Bloomberg first reported on April 6 that the JPMorgan trader had established such a massive position in credit derivatives that he was single handedly distorting market prices, a near impossible task in a market of that size. He was so overexposed that hedge funds and other big investors were lining up against him, taking the other side of his bets and waiting for him to inevitably fail. As Business Insider pointed out, those "rivals' may have been the impetus for the news stories. Drawing more attention to his unstable position certainly wouldn't have hurt their fortunes.
RELATED: The Latest Ideas on What Happens If the Debt Ceiling Isn't Raised

Some people were immediately concerned. The bloggers at ZeroHedge chalked it up to JPMorgan's king of the mountain arrogance:

They lie about everything, fully aware they have perpetual immunity because they are more powerful than the Fed (just recall Jamie Dimon's symbolic spitting in the face of Ben Bernanke), they are a tri-party repo dealer thus in the center of the entire shadow banking system, and have the biggest single-bank derivative exposure in the world, at $70 trillion as of December 31.
 JPMorgan is modern finance. And because of that they can and will get away with everything, lying on prime time TV most certainly included.

Others were more charitable ("To me this all seems like much ado about nothing"), but the biggest vote of confidence came from Iksil's boss, Jamie Dimon. A week after the story broke, Dimon called the whole thing a “tempest in a teapot.” His CFO Doug Braunstein said the positions were ”consistent with both, I think, the spirit and written rules of the Volcker rule as it is written today " and the firm was "very comfortable with the positions we have." That was April 13. Since that time we now know the firm lost more than $2 billion and that number could go higher. 
RELATED: Jamie Dimon: Wall Street's Hero for a Day

Dimon also reiterated that if any regulators had a problem with it they can “see everything we do whenever they want." Which is what they did. We also know now that the SEC and investigators in the United Kingdom began quietly asking questions almost immediately, trying to understand what was happening with JPMorgan's investments. Since the losses were announced, a full SEC investigation has been launched, but there will be questions about how regulators could have literally been sitting in the bank for the last month and either couldn't or wouldn't do anything about it. Iksil reportedly stopped making trades shortly after the press articles about him came out, but the company was unable to unwind his position without taking big losses.
RELATED: The Big Banks Have Plenty of Other Names for Fees

Despite all the attention from the media and authorities, no one seemed to figure out much about who Iksil is, and how one trader was able to control such a massive amount of funds in this way. Over $100 billion in a single index, by most estimates. Even now, a month later, no one seems to know anything about him except that he has two cool nicknames — the "London Whale" and "Lord Voldemort" — and that he apparently doesn't spend a lot of time on the Internet. There appears to be almost no public trace of him before April. A Lexis-search turned up nothing. There are no pictures of him online. Bloomberg couldn't even find out his exact age. (A co-worker says he's in his late 30s.)
RELATED: JPMorgan's Big Surprise: We Lost $2 Billion in 'Egregious Mistakes'

All we — allegedly! — know is that he's French (though his family may have Russian ancestry); he commutes to London from Paris; favors dark jeans and no ties at work; and is, according to a self-administered Bloomberg profile, a "champion of 'kick it', walking over water and humble.. yes."  Whatever that means.
What is clear is that he was not some wild card who was flaunting all the rules until he got caught. If anything, he may not even been the truly responsible party. Another report by Bloomberg from a few weeks ago says that his boss, Achilles Macris, is the real driving force behind these risky moves. Macris heads the chief investment office in London where Iksil is based. The CIO is typically tasked with hedging bets: doing its best to protect the banks assets from loss. However, the story goes that when Macris — who is described by colleagues as a smart and agressive idea man — took over JPMorgna's London CIO, he began to move beyond risk management into actual profit making, putting more and more of the bank's own money on the line. So much money that their "hedge" bets needed their own protection.
The truly troubling fact is that this is exactly the way Dimon wanted it. He's been railing for years against the government's attempts to rein in Wall Street and question the very idea that Congress or SEC could do its job. On April 5, the day the original stories about Iksil broke, Dimon had this to say about the newly created Financial Stability Oversight Council:

Although the FSOC was created, it is proving to be too weak to effectively manage the overlap and complexity. We have hundreds of rules, many of which are uncoordinated and inconsistent with each other. While legislation obviously is political, we now have allowed regulation to become politicized, which we believe will likely lead to some bad outcomes.

In other words, you can't control us, so stop trying. In its own way, this debacle may have proved Dimon right, but it could mean big trouble for his industry if Washington decides the only way to save the banks is to destroy them by breaking them up.