Whale Watch

JP Morgan:  'Whale' Clawbacks About Two Years of Compensation

"J.P Morgan Chase & Co. threw the book at the traders behind the "London Whale" blunder, seizing millions of dollars of compensation in what it called the "maximum permitted clawback" under its policies.  The New York company said Friday the clawbacks cover three London-based managers who had "direct responsibility" over the synthetic-credit portfolio at the center of the trading losses the company first disclosed in May. People familiar with the situation said the traders are Achilles Macris, Javier Martin-Artajo and Bruno Iksil, the trader nicknamed the "London Whale" for his outsize trading positions at the bank's Chief Investment Office, or CIO."
 
Hope their compensation was somewhere in the $5.8BB range.  Does anyone else see how the clawback could go really really badly for J.P. Morgan? J.P. Morgan is not going to get anything like their $5.8BB back so this is in large part a statement of principle and throwing a bone to investors.  However Iksil et al may choose go to court to get their compensation.  In doing to they are sure to claim that J.P. Morgan managers knew exactly what they were doing - which is going to open J.P. Morgan records up to subpoena  and that probably won't look too good for J.P. Morgan.  Just my two cents.