JP Morgan settles massive market manipulation case

Wall street giant JPMorgan Chase & Co. is paying US$920 million to resolve allegations that it engaged in manipulative trading in the U.S. Treasuries market and precious metals futures markets.

The firm entered a deferred prosecution agreement with the U.S. Department of Justice to resolve wire fraud charges stemming from alleged illegal trading in precious metals futures, U.S. Treasury futures, and in the cash market for U.S. Treasury notes and bonds.

Under the agreement, JPMorgan will pay over US$920 million, including a criminal monetary penalty, disgorgement and victim compensation.

According to the justice department, between March 2008 and August 2016, numerous traders on JPMorgan’s precious metals desks in New York, London and Singapore placed spoofing orders for precious metals futures.

A couple of those traders have pleaded guilty to criminal charges and several others are still facing charges.

Traders on the firm’s U.S. Treasuries desks in New York and London also engaged in spoofing in U.S. Treasuries markets.

Portions of the criminal penalty and disgorgement are to be credited against payments to be made to the U.S. Commodity Futures Trading Commission and the U.S. Securities Exchange Commission under separate agreements with the regulators.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.