JPMorgan pays $920 million to settle spoofing claims
Bloomberg News, 29 September 2021
The New York-based lender will pay the biggest monetary penalty ever imposed by the CFTC, including a $436.4 million fine, $311.7 million in restitution and more than $172 million in disgorgement, according to a statement from the Commodity Futures Trading Commission.
The CFTC said its order will recognize and offset restitution and disgorgement payments made to the Department of Justice and Securities and Exchange Commission.
The accord ends a criminal investigation of the bank that has led to a half-dozen employees being charged for allegedly rigging the price of gold and silver futures for more than eight years. Two have entered guilty pleas, and four others are awaiting trial. Continue reading “Article: JPMorgan pays $920 million to settle spoofing claims”
JPMorgan is set to pay US$1B in record spoofing penalty
Ben Bain, Tom Schoenberg and Matt Robinson, 23 September 2020
JPMorgan Chase & Co. is poised to pay close to US$1 billion to resolve market manipulation investigations by U.S. authorities into its trading of metals futures and Treasury securities, according to three people with knowledge of the matter.
The potential record for a settlement involving alleged spoofing could be announced as soon as this week, said the people who asked not to be named because the details haven’t yet been finalized. The accord would end probes by the Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission into whether traders on JPMorgan’s precious metals and treasuries desks rigged markets, two of the people said.
A penalty approaching US$1 billion would far exceed previous spoofing-related fines. It would also be on par with sanctions in many prior manipulation cases, including some brought several years ago against banks for allegedly rigging benchmark interest rates and foreign exchange markets.
Spoofing typically involves flooding derivatives markets with orders that traders don’t intend to execute to trick others into moving prices in a desired direction. The practice has become a focus for prosecutors and regulators in recent years after lawmakers specifically prohibited it in 2010. While submitting and then canceling orders isn’t illegal, it is unlawful as part of a strategy intended to dupe other traders.
It couldn’t be determined whether New York-based JPMorgan will face additional Justice Department penalties in court. Previous spoofing cases have been resolved without banks or trading firms pleading guilty to criminal charges. However, when prosecutors filed cases last year against individual JPMorgan traders they painted a grave picture of its precious metals desk, saying it operated as an illicit enterprise within the bank for almost a decade.
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Racketeering Law Makes Its Return to Wall Street
Peter J. Henning
The New York Times 24 October 2019
Prosecutors accused Michael Nowak, who was the head of precious metals trading at the bank, along with Gregg Smith and Christopher Jordan, of organizing the precious metals desk as a RICO enterprise to engage in “spoofing,” as well as wire and bank fraud in which JPMorgan and its customers were the victims
“Spoofing,” which was made a crime by the Dodd-Frank Act, happens when traders are “bidding or offering with the intent to cancel the bid or offer before execution.”
JPMorgan’s Metals Desk Was a Criminal Enterprise, U.S. Says
By Tom Schoenberg and David Voreacos
The head of the bank’s global precious metals desk, Michael Nowak, 45, and two others ripped off market participants and even clients as they illegally moved prices for gold, silver, platinum and palladium, the Justice Department said Monday. Nowak was placed on leave last month, a person familiar with the matter has said. The other traders charged were Gregg Smith, 55 and Christopher Jordan, 47.
JPMorgan traders indicted for market manipulation, racketeering: feds
FOX Business, 16 September 2020
Three JPMorgan employees, some of whom were executives, were indicted on charges related to making fake orders of gold, silver and other metals to trick the market, federal Department of Justice announced Monday.
Gregg Smith, 55, Michael Nowak, 45, and Christopher Jordan, 47 and other co-conspirators allegedly manipulated the market by placing orders that they later canceled, in turn deceiving other participants about the actual supply and demand of the precious metals between May 2008 and August 2016, while they worked for JPMorgan’s global precious metals trading desk, the DOJ said.
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Three J.P. Morgan precious metals traders charged as criminal probe continues
CNBC, 16 September 2019
Federal prosecutors on Monday accused three J.P. Morgan precious metals traders, including the global head of base and precious metals trading, of participating in a racketeering conspiracy in connection with a multiyear scheme to manipulate the markets and defraud customers.
The alleged scheme saw the nation’s largest bank by assets profit handsomely, while investors suffered losses.
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