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US prosecutors have accused JPMorgan, which is responsible for trading precious metals, of organizing an eight-year conspiracy to manipulate markets and defraud customers.
Michael Nowak has been indicted with two of his colleagues, Gregg Smith and Christopher Jordan, for a "massive, multi-year ploy," said Deputy Attorney General Brian Benczkowski.
According to the indictment, the three traders engaged in "widespread identity theft, market manipulation and fraud" while they were working at JPMorgan, one of the largest banks of bullion. They placed orders that they intended to cancel before their execution in order to "create liquidity and steer prices towards the orders they wanted to execute on the other side of the market," he said. -he declares.
The deal will strengthen the focus on global precious metals markets and the dominance of major banks such as JPMorgan. With HSBC, JPMorgan dominates global gold and silver trading flows.
Mr. Nowak, who joined JPMorgan in 1996, is on leave from the bank, according to someone familiar with the matter. JPMorgan declined to comment.
Between 2008 and 2016, traders sought to take advantage of algorithmic traders by placing real orders to buy or sell futures, some called "iceberg orders", which concealed the true size of the order, according to the indictment.
At the same time, they passed one or more orders that they had intended to cancel before performing so-called "misleading" orders on the opposite side, which were perfectly visible to the market , according to the indictment.
"By placing deceptive orders, the defendants and their accomplices had the intention of injecting false and misleading information on the actual supply and demand of precious metals futures contracts", said the DoJ. "And to deceive the other participants in these markets into believing that there is something wrong, namely that the visible order book accurately reflected the strengths of supply and demand. market-based demand. "
The DoJ claimed that the three men named in the indictment had placed deceptive orders for gold, silver, platinum and palladium on gold futures. scholarships managed by the CME group.
In addition to being traded as investments, precious metals also have widespread industrial uses, such as the use of silver in solar panels and platinum in catalytic converters for cars.
A former JPMorgan dealer, Jonathan Edmonds, pleaded guilty to spoofing charges last November. Another former JPMorgan precious metals trader, Christian Trunz, pleaded guilty in August.
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