Who Won Powerball? Not the Poor!

By Emily Flitter and David HenryNEW YORK Aug 8 (Reuters) - The trader at the center of JPMorgan Chase's $6.2 billion trading loss last year will not face U.S. charges related to the incident, a source familiar with the matter said on Thursday.Meanwhile, another source said JPMorgan is close to reaching a settlement with securities regulators over the trading loss.The trader, Bruno Iksil, who worked in JPMorgan's chief investment office in London and incurred losses on oversized positions in a derivatives market, is cooperating with government investigators, the source said.The Federal Bureau of Investigation in New York and the U.S. Securities and Exchange Commission, along with regulators in the UK, opened probes last year into the activity surrounding the costly bets, which earned Iksil the nickname "the London Whale" from fellow Wall Street traders.The case is still open, but JPMorgan is close to a deal with the SEC that will require the bank to pay a penalty and admit faults, according to a person familiar with the matter.While the company has apologized repeatedly for the debacle and described short-comings in its risk controls, the source was not clear on exactly what the bank will have to admit to settle the matter.The settlement is expected to be completed by the end of the year. It was first reported by The New York Times on Thursday.The fate of a potential criminal case against JPMorgan or other individuals who worked for the bank during the incident remains unclear.Spokesmen for the FBI and the SEC declined to comment. A spokeswoman for JPMorgan did not immediately respond to a request for comment. A spokeswoman for Preet Bharara, the U.S. attorney for Manhattan, declined to comment. Iksil's lawyer also declined to comment.In March, a U.S. Senate committee reported findings from its own investigation, concluding that JPMorgan ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in the portfolio for which Iksil was trading.Emails from Iksil to superiors that were later made public in conjunction with the Senate report show he tried to exit the positions he had taken once he realized he was being squeezed by traders taking the opposing positions in the small, illiquid market."The guys have a huge skew trade on and they will defend it as much as we do," Iksil wrote in a Jan. 30, 2012, email to a supervisor. "I think I should take the pain fast over the next month....It is pointless in my view to go for a fight....I have to let it go."Even so, Iksil continued to add to his trading positions for weeks afterward; his office did not begin to unwind the positions until early April, when information about JPMorgan's trades became public.Iksil, who worked in London but is French and lives with his family in Paris, was fired from JPMorgan along with two supervisors last year in the wake of the scandal.

This article is taken from Reuters.com