June 12, 2012 / 2:21 AM / 6 years ago

JPMorgan directors knew of bad trades: report

The lobby of JP Morgan headquarters is photographed through a window in New York May 22, 2012. REUTERS/Eduardo Munoz

NEW YORK (Reuters) - Some JPMorgan Chase & Co (JPM.N) directors and executives knew about risky practices by London traders about two years before bad bets caused the company to lose $2 billion, the Wall Street Journal reported on Monday.

Bruno Iksil, a London-based JPMorgan trader, known as the “whale”, is believed to have been involved in the company’s $2 billion loss in derivatives, first announced last month.

The loss hurt the company’s credit rating and caused a steep drop in its stock price. Several regulators and politicians reacted to the loss by demanding stiffer oversight for the banking industry.

According to the Journal’s report, some JPMorgan directors were briefed on the foreign-exchange-options bet that soured, and were told that the responsible trader would not be allowed to “go overboard in the future”, according to the report.

Discussions within JPMorgan’s Chief Investment Office to curb some London trading activity occurred as early as 2010, according to the report.

Reporting By Ernest Scheyder; Editing by Ron Popeski

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