Photo: flickr: Christian Steen
One of the biggest questions that people have been asking ever since JP Morgan announced that a trader in its London Chief Investment Office was on the other side of a $2 billion trade is: How did this guy get away with these humongous positions?According to the Wall Street Journal, it was pretty simple — The London Whale confused people.
Bruno Iksil, a.k.a ‘The London Whale’, had a solid reputation. He went to a prestigious French engineering school, École Centrale Paris, and back in 2008 he made some treacherous trades again the ABX subprime mortgage index which (though not all of them his) netted the bank about $1 billion.
So when he dug into the trade that got him into trouble, a bearish position in an index known as the IG 9, he had credibility. The other man who is largely blamed for this mess, trading executive Achilles Macris, approved his trades.
However (from the WSJ):
…sometimes Mr. Iksil resisted sharing some details of his moves, according to a colleague.Mr. Iksil once confided to the colleague that when he wanted to avoid questions from supervisors about his trades, he sometimes would start discussing a mathematical term, equation or other technical jargon, to confuse and end the conversation. “He wasn’t trying to evade, he sometimes just didn’t have patience if it was his trading idea,” the colleague said.
One colleague describes Iksil as “gentle, polite and smart.” Another said that at the New York office, he once wore the same clothes three days in a row.
By contrast, Macri was seen as more flashy — he lives in a top floor of a Victorian mansion block overlooking Westminster Cathedral . He clashed with his co-workers at previous jobs and with his superiors at JP Morgan. Still, he was seen as leader wherever he went.
“He was aggressive, fast and a bit brutal, but people liked working for him,” says Fred Destin, a venture capitalist at Cambridge, Mass.-based Atlas Venture who worked with Mr. Macris from 2001 to 2004 at the bank.
So there you have it, jargon and bravado. Don’t be fooled.
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