JPMorgan Chase to Pay $920M for Fraudulent Trades in Futures Markets
By Attorney Jared Levy
JPMorgan Chase & Co. recently agreed to pay over $920 million in criminal penalties, restitution, and disgorgement for fraudulent spoofing trades in futures markets for U.S. Treasuries and precious metals. JPMorgan agreed to the payment under a three-year deferred prosecution agreement with the U.S. Department of Justice. JPMorgan’s subsidiaries, J.P. Morgan Securities LLC and JPMorgan Chase Bank NA, also are parties to the agreement.
Under the agreement with the DOJ, JPMorgan admitted that, from 2008 to 2016, its traders placed purchase and sale orders for U.S. Treasuries products and precious metals but intended to cancel them before execution. This illegal tactic – known as “spoofing” – aims to send false price signals and move markets in advantageous directions. JP Morgan allegedly collected profits of over $170 million from its spoofing practices, while causing more than $300 million in losses for others.
Assistant Attorney General Brian C. Rabbitt of the DOJ’s Criminal Division stated: “For over eight years, traders on JP Morgan’s precious metals and U.S. Treasuries desks engaged in separate schemes to defraud other market participants that involved thousands of instances of unlawful trading meant to enhance profits and avoid losses. Today’s resolution — which includes a significant criminal monetary penalty, compensation for victims, and requires JP Morgan to disgorge its unlawful gains — reflects the nature and seriousness of the bank’s offenses and represents a milestone in the department’s ongoing efforts to ensure the integrity of public markets critical to our financial system.”
Again and again, the largest banks and brokerage firms in the U.S. are alleged to have engaged in fraudulent practices that undermine honesty in the markets, yet are allowed to continue to operate. At Morgan & Morgan, we are committed to fighting for justice against these firms. Contact us at 888.744.0142 today to speak with an experienced securities attorney at Morgan & Morgan’s Business Trial Group.
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