UK regulator drops case against London Whale trader

By Kirstin Ridley

LONDON (Reuters) - Bruno Iksil, the former JPMorgan (JPM.N) trader dubbed the London Whale for his outsized trades, has escaped a fine and possible industry ban in Britain after an investigation into a scandal that cost the bank $6.2 billion (4 billion pounds) in 2012, his lawyers said on Thursday.

Iksil, whose former boss Javier Martin-Artajo and junior colleague Julien Grout have been charged with offences including securities fraud and conspiracy in the United States, was told on July 1 that the UK regulator would take no action against him.

"This is a tremendous victory for my client, Mr Bruno Iksil, who has been vindicated by the FCA without being required to attend a hearing," said Raymond Silverstein, an employment lawyer at Browne Jacobson, who has advised Iksil since 2012.

JPMorgan was fined more than $1 billion by U.S. and British regulators in 2013 for management failings over the scandal.

Chief Executive Jamie Dimon initially dismissed it as a 'tempest in a teapot' - a comment that would come back to haunt the man who runs the largest U.S. bank.

Manhattan federal prosecutors charged Martin-Artajo and Grout, who each worked for JPMorgan's chief investment office in London, with wire fraud and conspiracy to falsify books and records related to the trading losses two years ago.

The two men were charged with deliberately trying to hide hundreds of millions of dollars in losses on trades in a portfolio of synthetic credit derivatives tied to corporate debt. Such derivatives are financial instruments designed to bet on the probability of corporate default.

But Iksil, who has been cooperating with U.S. authorities and has not faced U.S. charges, emerged in the criminal complaints as wanting to exit the unwieldy trading positions and at times tried to argue against hiding mounting losses.

Britain's Financial Conduct Authority (FCA) had been investigating whether Iksil was guilty of misconduct by failing to prevent or detect mispricing and other market conduct failures, the lawyers said.

In an emailed statement, the FCA said only: "We can confirm that the FCA will not be taking any further action."

Iksil, who was fired along with Martin-Artajo in 2013 as the scandal surrounding the bank's losses escalated, is now "considering his position and rights", the statement said.

He remains a cooperating witness in ongoing U.S. criminal and civil proceedings and will make no further comment so as not to prejudice those proceedings, the statement added.

Iksil's legal team included Silverstein and Michael Potts and Catherine Robinson of Byrne and Partners.

($1 = 0.6500 pounds)

(Reporting by Kirstin Ridley; Editing by Tom Brown)