Article: JPMorgan Chase Fined US$920 Million For Market Manipulation

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JPMorgan Chase Fined US$920 Million For Market Manipulation

MSHERELYN GOH, 02 October 2020

Just like in an episode of Billions, only Bobby Axelrod would actually have to pay up, JPMorgan Chase has to fork out US$920 million to settle US civil and criminal charges over fake trades in precious metals and Treasury futures designed to manipulate the market,. The settlement comes as the largest bank in the US reached a deferred prosecution agreement with the Justice Department to resolve criminal fraud charges over the long-running schemes.

In one of the schemes, JPMorgan traders in New York, London and Singapore between 2008 and 2016 commissioned tens of thousands of orders for gold, silver, platinum and palladium futures that were placed in order to be cancelled to deceive other market participants, wrote the Department of Justice (DOJ), one of three agencies involved in the case, in a press release. Continue reading “Article: JPMorgan Chase Fined US$920 Million For Market Manipulation”

Article: CFTC & SEC: JP Morgan manipulated Treasuries market during flash crash period

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CFTC & SEC: JP Morgan manipulated Treasuries market during flash crash period

dan.barnes, 29 September 2020

US market regulators the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have fined JP Morgan over US$920 million in penalties and disgorgements for manipulative trading, or spoofing, in the US Treasuries, US Treasuries futures, and commodity markets, between 2009 and 2016. The CFTC noted that the bank also did not respond to warnings from the regulators or the CME and at points misled the investigation.

The bank’s behaviour during this period raises questions that neither the bank nor the regulators are prepared to answer, regarding its effect on market stability.

During the period in question, on 15 October 2014, the US Treasury market experienced a ‘flash crash’, which saw the 10-year treasury rate fall 34 basis points over a 10-minute period from 2.2% to 1.86%, a 52-week low, before rebounding for the end of day. Treasury futures volume reached nearly 1.6 million trades, an all-time record, having only broken the 800,000 trades a day barrier three times before.

A similar flash crash in the US equities markets in 2010 was attributed by the CFTC to manipulative trading by a lone trader on the CME via its E-mini S&P 500 futures.
When asked whether JP Morgan’s activity had been reviewed as a potential trigger of the 2014 flash crash, both the SEC and CFTC declined to comment. JP Morgan also declined to comment.

The press office of the CME, which is also the market for US Treasury futures, declined to comment on how JP Morgan had spoofed on its markets for eight years without being stopped.

The CFTC found that from at least 2008 through 2016, JP Morgan, “through numerous traders on its precious metals and Treasuries trading desks, including the heads of both desks, placed hundreds of thousands of orders to buy or sell certain gold, silver, platinum, palladium, Treasury note, and Treasury bond futures contracts with the intent to cancel those orders prior to execution.”

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Article: JPMorgan to pay $920 million for manipulating precious metals, treasury market

Article - Media, Publications

JPMorgan to pay $920 million for manipulating precious metals, treasury market

Abhishek Manikandan, Michelle Price, 29 September 2020

(Reuters) – JPMorgan Chase & Co has agreed to pay more than $920 million and admitted to wrongdoing to settle federal U.S. market manipulation probes into its trading of metals futures and Treasury securities, the U.S. authorities said on Tuesday.

The landmark multi-agency settlement lifts a regulatory shadow that has hung over the bank for several years and marks a signature victory for the government’s efforts to clamp down on illegal trading in the futures and precious metals market.

JPMorgan will pay $436.4 million in fines, $311.7 million in restitution and more than $172 million in disgorgement, the Commodity Futures Trading Commission (CFTC) said on Tuesday, the biggest-ever settlement imposed by the derivatives regulator.

Between 2008 and 2016, JPMorgan engaged in a pattern of manipulation in the precious metals futures and U.S. Treasury futures market, the CFTC said. Traders would place orders on one side of the market which they never intended to execute, to create a false impression of buy or sell interest that would raise or depress prices, according to the settlement.

This manipulative practice, which is designed to create the illusion of demand, or lack thereof, is known as “spoofing.”

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Subject: Daniel Pinto

Subject of Interest

Daniel Pinto is Co-President and Chief Operating Officer of JPMorgan Chase, a leading global financial services firm, and a member of its Operating Committee. He is also CEO of its Corporate & Investment Bank, an industry leader in investment banking, trading markets and investor services. Daniel holds a bachelor’s degree in Public Accounting and Business Administration from Universidad Nacional de Lomas de Zamora in Buenos Aires. He is a member of the Board of Directors of the Institute of International Finance.


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