Natixis Suspends Trader in New York Amid Internal Probe
Natixis Suspends Trader in New York Amid Internal Probe
(Bloomberg) -- Natixis SA, the French lender roiled by risk-management problems since last year, has suspended a senior trader at a subsidiary in New York pending an internal investigation.
Jean-Baptiste Jacquet, who has led equity-derivatives businesses for Natixis in New York, stopped turning up for work in recent weeks, according to people familiar with the matter. Officials at the bank are reviewing issues around how some of Jacquet’s transactions have been recorded, the people said. The bank is also examining how he managed his portfolio of trades, they said, requesting anonymity as the details aren’t public.
“It is a purely internal procedure that is by no means related to a P&L loss and has no impact whatsoever on Natixis’ clients or businesses,” the Paris-based lender said Tuesday in a statement. Jacquet didn’t respond to repeated requests for comment.
Natixis Chief Executive Officer Francois Riahi is trying to bolster controls after a series of mishaps drove down the French bank’s stock price and attracted regulatory scrutiny. Earlier this month, he created a new position specifically overseeing risk at its U.S. subsidiary and replaced his global head of risk with a top hire from JPMorgan Chase & Co.
“Natixis would like to make it clear that it constantly monitors and reviews its employees’ performance through well-established internal procedures that are applicable to all employees,” the company said in the statement.
Shares of Natixis extended losses on news of the suspension, falling as much as 6% before closing 3.9% lower in Paris trading. The stock is down more than a fifth over the past year.
Jacquet joined the French bank in 2006 and he has been registered at U.S. subsidiary Natixis Securities Americas LLC since 2013, according to his LinkedIn profile and the U.S. Financial Industry Regulatory Authority. He oversees two equity-derivatives businesses that deal in esoteric contracts tied to stocks, his profile shows.
Jacquet faced similar questions internally about two years ago when officials investigated whether he had improperly booked a trade that lost the bank about $2 million, the people said. Wilson, the Natixis spokesman, declined to elaborate on how that probe concluded.
At Natixis’s investment-banking division, which focuses on structuring complex trades for clients rather than dealing in common stocks and bonds, executives have focused on generating more revenue from equity derivatives and, regionally, across the Americas. Equities income excluding cash equities slid 12% to 336 million euros ($370 million) for the first nine months of 2019 despite a “good performance from the U.S.” in the third quarter, a presentation shows.
Natixis Securities Americas LLC had about $19 billion of assets at the end of June, according to a recent filing. In December of last year, the subsidiary was among three firms that paid more than $6 million to settle charges that it provided inaccurate trading information to the Securities and Exchange Commission.
Riahi, a veteran of Natixis’s investment bank before becoming CEO, has spent much of his time in charge putting out such fires. The firm lost hundreds of millions of dollars on exotic Korean derivatives in late 2018 and the trades were later examined by the European Central Bank, Bloomberg reported.
Natixis officials also had to quell internal concerns after then-Chief Risk Officer Pierre Debray sold shares in the lender weeks before it announced losses, Bloomberg reported. And at the asset management arm, clients fled its H20 Asset Management affiliate amid concerns over investments in thinly traded debt tied to controversial German financier Lars Windhorst.
Earlier this month, Natixis hired senior JPMorgan executive Olivier Vigneron to replace Debray as global CRO, and appointed Stephane Morin to the newly-created role of head of risk for the U.S. The firm also said it would strengthen governance at its asset-management division. That followed the hiring of a new batch of senior traders and managers in Hong Kong to replace those who left in the wake of the derivatives losses.
To contact the reporters on this story: Donal Griffin in London at dgriffin10@bloomberg.net;Viren Vaghela in London at vvaghela1@bloomberg.net
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Dan Reichl, Josh Friedman
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