Justice Department Charges Three Traders Over Alleged Metals Contracts Manipulation
September 16 2019 - 11:45AM
Dow Jones News
By Dave Sebastian
The Justice Department on Monday said it has charged a former
and two current JPMorgan Chase & Co. precious-metals traders
for their alleged participation in a racketeering conspiracy
involving precious metals futures contracts over an eight-year
period.
The men charged are Gregg Smith, Michael Nowak and Christopher
Jordan. The three traders were indicted in the U.S. District Court
for the Northern District of Illinois under U.S. District Judge
Edmond Chang, the department said.
JPMorgan Chase has placed Mr. Smith, 55 years old, and Mr.
Nowak, 45 years old and a managing director at the firm, on leave,
said a person familiar with the matter. Mr. Jordan, 47 years old,
left the bank in 2009 and subsequently worked as a metals trader at
other banks.
"The defendants and others allegedly engaged in a massive,
multiyear scheme to manipulate the market for precious metals
futures contracts and defraud market participants," Assistant
Attorney General Brian Benczkowski said in prepared remarks.
The department charged the three traders with one count of
racketeering conspiracy, one count of bank fraud and counts of
conspiracy to commit wire fraud.
The Justice Department alleges that the men engaged in
widespread spoofing, market manipulation and fraud by placing
orders they intended to cancel before execution as a way to create
liquidity and drive prices toward orders they wanted to execute on
the other side of the market.
The U.S. Commodity Futures Trading Commission also said Monday
it filed a civil enforcement action in the Northern District of
Illinois against Mr. Nowak and Mr. Smith.
Co-conspirators identified in the Justice Department case are
John Edmonds and Christian Trunz. Mr. Edmonds pleaded guilty on
Oct. 9, 2018, to conducting commodities and wire fraud, price
manipulation and spoofing. Mr. Trunz pleaded guilty on Aug. 20 to
charges of spoofing and conspiracy to engage in spoofing.
In a separate statement, the CFTC said Monday it has reached a
settlement with Mr. Trunz in recognition of his cooperation
agreement with the CFTC's Division of Enforcement.
The Justice Department said it expects Mr. Smith to make an
initial appearance in the Southern District of New York before U.S.
Magistrate Judge Judith McCarthy, and Mr. Nowak and Mr. Jordan to
make theirs in the District of New Jersey before U.S. Magistrate
Judge Michael Hammer.
Write to Dave Sebastian at Dave.Sebastian@wsj.com
(END) Dow Jones Newswires
September 16, 2019 11:30 ET (15:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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