JPMorgan to pay $920M for manipulating bond, metals markets

Marco Green
September 30, 2020

JPMorgan Chase will pay $920 million to settle USA civil and criminal charges over fake trades in the precious metals and Treasury markets created to manipulate the market, U.S. agencies announced Tuesday.

JPMorgan Chase admitted Tuesday to manipulating the markets for precious metals and U.S. Treasuries, agreeing to pay $920 million in fines and penalties for the illegal behaviour.

In one of the schemes, JPMorgan traders in New York, London and Singapore between 2008 and 2016 commissioned tens of thousands of orders in the gold, silver, platinum and palladium futures that were placed in order to be canceled to deceive other market participants, said a press release from the Department of Justice, one of three agencies involved in the case.

According to the settlement, between 2009 and 2016 JPMorgan Treasurys traders placed orders on one side of the market which they never meant to execute, to create a false impression of buy or sell interest that would raise or depress prices.

The case covers eight years and relates to the practice of "spoofing", where traders put in large orders to buy or sell a security with no intention of executing them, creating the appearance of demand or supply for a particular asset. The goal was to use the spoof to nudge the market in a certain direction, and then activate the intended trade to profit from the move.

"This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains", said CTFC Division of Enforcement Director James McDonald in the statement.

In parallel settlements, the bank entered into a Deferred Prosecution Agreement with the Department of Justice and the United States Attorney's Office for the District of CT, staving off criminal prosecution on charges of wire fraud.

It also agreed to pay $35 million to settle related charges with the Securities and Exchange Commission, although the bank's payment to the CFTC would offset that fine, it said.

Other reports by Click Lancashire

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