We may have had the wrong guy.While Frenchman Bruno Iksil has been fingered by many, including us, as the “London Whale,” soon after the initial Whale story, by the Wall Street Journal, came out, Bloomberg had a follow-up indicating that the real mastermind behind the hedging positions was a man named Achilles Macris.
“It’s Macris, not Iksil, who was behind the strategy that led to an unprecedented build-up of credit risk in JPMorgan’s chief investment office, three former employees of the bank said,” Bloomberg wrote.
So what do we know about Macris?
JPM hired him in 2006 to run the probably soon to be infamous Chief Investment Office in London.
Prior to this, he ran the proprietary trading desk for Dresdner Kleinwort Wasserstein. Dresdner was merged with Commerzbank in that firm’s purchase of DrKW’s parent company, Dresdner Bank.
A former colleague of Macris described him as “an idea- generating machine who was blunt and didn’t suffer fools, said Duncan Hennes, who worked with him at Bankers Trust,” Bloomberg reported.
According to eFinancialNews, in between DrKW and JPM, Macris spent just 21 days at a fund called Cardinal Asset Management, based in Dublin.
“The reasons behind Macris’ swift departure remain unclear, and his loss may have delayed the firm’s ambitions to launch a clutch of hedge funds and funds of funds,” the site reported.
Macris said upon what would prove his short-lived hire at Cardinal: “At this stage of my career I want to focus on trading and building an industry-leading alternative asset management business,” the site reported.
A letter from the UK’s Financial Services Adminstration dated August 15, 2005 adds a modification to a statute governing employee competency.
The original statute, TC 2.4.5R (1)(b), states:
“A firm must not assess an employee as competent to engage in or oversee an activity unless the employee has passed each module of an appropriate examination.”
FSA’s modification addressed to Capital states:
“TC 2.4.5 R applies to the firm by inserting after TC 2.4.5R(2) new sub-paragraph TC 2.4.5R(3) as follows:
“TC 2.4.5R(3) (1)(b) does not apply to Achilles Othon Macris only to the extent that he:
(i) provides investment management services to
intermediate customers and market counterparties; and
(ii) continues to be employed by the firm
The next section deals with the conditions under which the modification holds:
4. This direction is subject to the conditions that the firm:
(a) is satisfied that Achilles Othon Macris has sufficient technical knowledge and experience
as is at least equivalent to the standard they would have obtained had they taken an
According to the UK’s Financial Services Authority, Macris has no disciplinary actions against him and he remains listed as an “active” JPM employee.
The haunting kicker, from Bloomberg:
“Some of Macris’s bets are now so large that JPMorgan probably can’t unwind them without losing money or roiling financial markets, the former executives said, based on knowledge gleaned from people inside the bank and dealers at other firms.”