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On the 10th of August 2022, a federal jury found two former JPMorgan Chase precious metals traders, Gregg Smith and Michael Nowak, guilty of fraud. They had manipulated gold markets for more than eight years with a tactic called "spoofing."
A federal jury in the Northern District of Illinois convicted two former precious metals traders at JPMorgan Chase & Co. of fraud, attempted price manipulation, and spoofing in a multi-year market manipulation scheme of precious metals futures contracts.
Spoofing is defined in the Commodity Exchange Act as “bidding or offering with the intent to cancel the bid or offer before execution.” – 7 U.S.C. § 6c(a)(5)(C)
The fraudulent practice, which spanned over eight years, from May 2008 to August 2016, involved thousands of deceptive trading sequences for gold, silver, platinum, and palladium futures contracts traded through the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX).
Basically, for years the defendants allegedly placed thousands of false orders for precious metals, creating a ruse that lured others into making disadvantageous trades.
In September 2020, JPMorgan admitted to committing wire fraud in connection with: (1) unlawful trading in the markets for precious metals futures contracts; and (2) unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds. JPMorgan entered into a three-year deferred prosecution agreement through which it paid more than $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation.
Please find below the Deferred Prosecution Agreement between JPMorgan and the US Department of Justice of September 2020
#law #business #finance #businessethics #corporations #corporatelaw #criminaljustice #financialcrime #fraud #crime #market #traders #futures #manipulation #spoofing #JPMorgan #DPA #DOJ #USA
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