Courtesy of Pam Martens.
Qu’est-ce que c’est? Frenchmen?
Jamie Dimon, Chairman and CEO of JPMorgan Chase, Testifying Before Congress on the London Whale Trading Losses
In the quintessentially American male testosterone epicenter known as Wall Street, Frenchmen are dropping like flies. Not so much the American CEOs in Wall Street’s corner offices. The only handcuffs these guys are seeing are the golden ones.
Fabrice Tourre, the 34-year old Goldman Sachs salesman from an elite educational background in France, was found guilty of six counts of securities fraud in a Manhattan jury trial that ended 12 days ago. The case was a civil suit brought by the Securities and Exchange Commission. One of those counts was for “aiding and abetting” Goldman Sachs in the fraud. Goldman Sachs did not stand trial, in the technical sense although it certainly has in the court of public opinion, because it settled its charges with a payment of $550 million. Not only did the corporation not stand trial, but neither did the American hedge fund owner, John Paulson, who, according to the SEC, plotted with Goldman Sachs in this same deal, known as ABACUS, to create a bundled pool of assets designed to fail so that he could make $1 billion betting against it (known as shorting). Investors lost approximately the same $1 billion that Paulson’s hedge fund made.
Now, according to U.S. and international media reports, another Frenchman, Julien Grout, is about to be indicted by the U.S. Justice Department on criminal charges for his alleged role in mispricing derivatives and hiding trading losses in the JPMorgan Chase London Whale matter. Another employee, Javier Martin-Artajo, is likely to be charged as well according to reports.
The actual employee known as the London Whale, Bruno Iksil, also a Frenchman, has been cooperating with prosecutors and may escape charges or receive a lesser charge than the other two, according to reports. Iksil received the moniker, London Whale, after taking outsized positions in an illiquid derivatives index and effectively becoming the market. Unfortunately, after the market turned against him, his positions were so large he had no exit strategy. JPMorgan has acknowledged losing $6.2 billion on the bets.
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