* Bruno Iksil played no role in Lehman collapse -JPMorgan
* Lehman suing JPMorgan in $8.6 billion case
By Jonathan Stempel
NEW YORK, Feb 28 The former JPMorgan Chase & Co
trader known as the "London Whale" was not responsible
for Lehman Brothers Holdings Inc's bankruptcy and should not be
dragged into an $8.6 billion lawsuit accusing the largest U.S.
bank of causing it, JPMorgan said.
In a Wednesday filing in Manhattan bankruptcy court,
JPMorgan said Lehman knew from documents it produced itself that
the trader, Bruno Iksil, had nothing to do with allegedly
mismarked derivative trades about which Lehman wanted to take
JPMorgan also said Lehman and its unsecured creditors
committee, which also seeks Iksil's testimony, had pointed to
nothing that shows the bank's Chief Investment Office had any
role in the collateral requests at the center of Lehman's
Moreover, getting Iksil involved wastes time and money,
JPMorgan said, particularly in light of statements by former
U.S. Treasury Secretaries Timothy Geithner and Henry Paulson
that the collateral requests did not cause Lehman to fail.
"It is readily apparent that the only real reason for
plaintiffs interest in taking Mr. Iksil's deposition is that he
has been in the news," JPMorgan said.
Lehman spokeswoman Kimberly Macleod said the company's
lawyers would review the filing.
Iksil gained notoriety after his activities were linked to
$6.2 billion of trading losses at JPMorgan's Chief Investment
Office. The French national had worked in London for the New
JPMorgan was Lehman's main clearing bank, handling
third-party dealings. Lehman accuses JPMorgan of hastening the
bankruptcy by using what it learned in that capacity to extract
$8.6 billion of collateral in the four business days prior to
the Sept. 15, 2008, Chapter 11 filing.
Citing Iksil's "practice of intentional mismarking," Lehman
said it wanted to review trades that led to a large,
"unjustified" collateral call on Sept. 9, 2008.
Lehman also said it wanted to review how the Chief
Investment Office managed JPMorgan's exposure to what was once
Wall Street's fourth-largest investment bank.
Lehman said Iksil's lawyers have indicated he will not
cooperate without an official request, prompting it to ask U.S.
Bankruptcy Judge James Peck for permission to start the process.
Last April, Peck narrowed but refused to dismiss Lehman's
lawsuit, saying the company could pursue claims that JPMorgan
had acted in a "commercially unreasonable" manner.
Lehman emerged from Chapter 11 last March. It has said it
hopes to repay creditors about $65 billion. That process is
expected to take several years.
The JPMorgan case is Lehman Brothers Holdings Inc et al v.
JPMorgan Chase Bank NA, U.S. Bankruptcy Court, Southern District
of New York, No. 10-ap-03266. The main bankruptcy case is In re:
Lehman Brothers Holdings Inc in the same court, No. 08-13555.