Former JPMorgan exec wins London appeal over Whale case

By Kirstin Ridley

LONDON, May 19 (Reuters) - A former JPMorgan (LSE: JPIU.L - news) executive who supervised a division that ran up $6.2 billion of losses in the "London Whale" scandal of 2012 has won a second legal challenge against Britain's regulator in a closely-watched court battle.

The Court of Appeal said on Tuesday that although Achilles Macris had not been named, he had been identified and should have been allowed to respond when the Financial Conduct Authority (FCA) fined JPMorgan almost 140 million pounds ($217 million) in 2013 over huge bets by former trader Bruno Iksil.

The decision could have implications for how much detail can be published in enforcement notices. The case has been closely watched by scores of traders who also allege they have been identified in FCA notices and not given a right of reply.

The FCA, which could yet appeal to the Supreme Court, said only: "We are considering the judgment carefully."

Macris, a Greek citizen, ran the London division of JPMorgan's Chief Investment Office (CIO) when Iksil, nicknamed "the London Whale" for his outsized derivatives trades, stacked up eyewatering losses. His job title was International Chief Investment Officer.

In its enforcement notice, the FCA said that "by virtue of the conduct of the CIO London management", JPMorgan had deliberately misled the regulator.

Arguing that the term "CIO London management" had been intentionally used to refer specifically to him, rather than a body, Macris argued that a series of FCA notices identified him and were clearly prejudicial to him and yet he had had no opportunity to contest the allegations.

A secondary process should now start automatically to decide whether the criticisms against him are valid, his lawyer at Clifford Chance said.

JPMorgan, whose Chief Executive Jamie Dimon initially dismissed the London Whale incident as a 'tempest in a teapot', was fined more than $1 billion by U.S. and British regulators.

Iksil's former boss Javier Martin-Artajo and junior trader Julien Grout were indicted by U.S. authorities on five charges each, including securities fraud and conspiracy. Iksil has been cooperating with U.S. authorities and not faced charges.

Martin-Artajo, who lives in Spain, and Grout, who lives in France, have not travelled to the U.S. to face charges. U.S. prosecutors said earlier this month their efforts to extradite Martin-Artajo had hit a dead end. France does not extradite its citizens.

Macris was Martin-Artajo's supervisor.

($1 = 0.6465 pounds) (Reporting by Kirstin Ridley; Editing by Keith Weir)