The Justice Department found two former JPMorgan traders guilty of manipulating gold prices by placing misleading orders and ultimately rigging the precious metals market.
As reported by the Wall Street Journal, Michael Nowak, who at the time was head of JPMorgan Chase’s precious metals desk, and Gregg Smith, a top gold trader, were convicted of spoofing, fraud, and market manipulation by a Chicago jury. The 8-day deliberation took into account various evidence, including chat logs, trading records, and testimonies from former co-workers. “They had the power to move the market, the power to manipulate the worldwide price of gold,” prosecutor Avi Perry said in his closing argument.
The case was one of the Justice Department’s largest, and marks a major milestone in its campaign in uncovering and punishing those taking part in deceitful futures markets trading called spoofing. Congress outlawed the practice in 2010, but it is still prevalent at some major US bank’s trading desks. Back in 2020, JPMorgan agreed to pay $920 million to settle criminal and regulatory charges related to market manipulation— the largest such sum paid by a US bank so far.
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Information for this briefing was found via the WSJ. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
