Pass the Popcorn

You may recall that in 2012,  Bruno Iksil, aka the, "London Whale," lost billions of dollars for JP Morgan by playing Russian Roulette with credit default swaps.

He agreed to testify against two relatively low level employees, but is now saying that the orders to cover up the losses came from Jamie Dimon and his Evil Minions^™:

The U.S. case against two former J.P. Morgan Chase & Co. traders charged with concealing billions of dollars in losses fell apart because a key witness known as the London Whale shifted blame to Chief Executive Officer James Dimon and other top executives, according to a person familiar with the matter.

The 2012 trading debacle that unfolded inside a London outpost of J.P. Morgan ultimately cost the bank more than $6 billion. Former trader Bruno Iksil, who was nicknamed the London Whale for his outsize bets, agreed in 2013 to testify against ex-coworkers Javier Martin-Artajo and Julien Grout for their alleged roles in hiding the losses.

But over the past year, Mr. Iksil changed his story.

“I mostly inferred that Dimon and his close lieutenants were responsible much, much more than my two colleagues could ever be,” Mr. Iksil said in an email, his first comments since prosecutors requested the case be dropped on July 21.

Mr. Iksil’s shifting explanations about who was responsible helped to end the high-profile U.S. criminal case, the person said.

On July 21, prosecutors in the Manhattan U.S. attorney’s office filed a motion in federal court to drop the charges against Messrs. Martin-Artajo and Grout, saying the government “no longer believes that it can rely on the testimony of Iksil in prosecuting this case” after “a review of recent statements and writings made by Iksil.” The office provided no other details beyond that statement.

………

Mr. Iksil never asserted that Mr. Dimon gave this initial order, but on his website, he cited a September 2010 public presentation from the CEO that predicted such reductions as a way of meeting new regulatory demands.

Even as losses mounted in 2012, valuations of those positions weren’t hidden, Mr. Iksil wrote in his memoir. Instead, he wrote, they were communicated to top bank officers, suggesting to Mr. Iksil that others were fully aware of the issues.

A J.P. Morgan spokeswoman declined to comment about Mr. Iksil’s allegations.

There is an old saying, "A fish rots from the head down."

It seems to apply here.