JP Morgan Chase (NYSE:JPM)
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2 Months : From Aug 2019 to Oct 2019
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)
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