[ad_1]
Federal prosecutors on Monday accused three JP Morgan Chase traders of manipulating the precious metals futures market in a program that cost investors tens of millions of dollars.
A New York FBI official, William F. Sweeney, said that the men charged in the eight-year program had traded gold, silver, platinum and palladium from the US. in a way that undermined the "natural balance of supply and demand".
Michael Nowak, who ran the precious metals trading office of "Bank A" – an institution previously known by the Department of Justice as JP Morgan – was arrested along with fellow traders Christopher Jordan and Gregg Smith.
The scheme is similar to those described in "Flash Boys", a 2014 book by fiction author Michael Lewis. The book set off a fire storm on Wall Street on high-speed trading and spoofing practices, in which traders try to send fictitious purchase orders.
The merchants at the center of the file, announced Monday morning, are mainly responsible for trying to place fictitious purchase orders for the future before trying to resell them, to cause renewed interest in commodities and to increase their price.
Less than a second after selling at the higher price, they canceled their fake purchase orders, letting the market believe there was additional demand.
According to the indictment, the traders would also have driven the project upside down whenever they would have needed to lower the price, by submitting fictitious sales orders.
"The accused and others would have been involved in a massive multi-year program to manipulate the precious metals futures market and defraud the participants," said Deputy Attorney General Brian A. Benczkowski.
"These accusations should leave no doubt that the ministry is determined to prosecute those who undermine investor confidence in the integrity of our commodity markets," he added.
In a statement, Nowak's lawyers said that it was "really unfortunate that the DOJ decided to sue" against his client, adding that Nowak "had not done anything about it. wrong".
"We look forward to representing him at the trial and we expect him to be fully exonerated," said lawyers David Meister and Jocelyn Strauber.
Jamie MacDonald, head of law enforcement for the Commodity Futures Trading Commission, said the scheme "has not been monitored for 8 years and involved thousands of transactions."
In a call for journalists on Monday, Benczkowski said the Justice Department would continue to use the data to develop business, as it does with investigations related to the opioid crisis.
"It is fair to say that the data we have in our possession has directed us to the trading activities of these traders," said Benczkowski.
The indictment notes that the regime was not foolproof, traders sometimes not canceling orders quickly enough.
Nowak, 45, Jordan, 47, and Smith, 55, were joined by traders John Edmonds, Christian Trunz, and Corey Flaum, also of JP Morgan, who had previously pleaded guilty in this case. Trunz has a cooperation agreement with federal prosecutors.
Smith, Trunz and Flaum joined JP Morgan through the late investment bank Bear Stearns as part of the bank's takeover of the bankruptcy investment bank at the start of the financial crisis of 2008.
Daniel Arkin contributed.
[ad_2]
Source link