JPMorgan traders charged by DOJ, accused of rigging metal markets

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  • Two current and one former JPMorgan traders were charged with market manipulation in precious metals trading, according to the US Department of Justice.
  • An unsealed indictment alleges the traders used "deceptive orders" to drive up the price and liquidity of trades they sought on the opposite side of the market.
  • Two former JPMorgan precious metal traders described as "among the defendant's co-conspirators" already pled guilty to illegal spoofing.
  • Read the full indictment here.
  • Visit the Markets Insider homepage for more stories.

Three JPMorgan traders were charged with market manipulation by the US Department of Justice on Monday.

The unsealed indictment alleges a racketeering conspiracy between two current precious-metals traders at JPMorgan, as well as one former employee. The scheme involved trades of gold, silver, platinum, and palladium between 2008 and 2016, according to the DOJ.

Here's who was charged in the indictment:
  • Gregg Smith: Joined JPMorgan in May 2008, and served as an executive director and trader on the precious metals desk.
  • Michael Nowak: Joined in July 1996, served as a managing director and ran the global precious metals desk.
  • Christopher Jordan: Joined in March 2006 and served as an executive director and trader on the precious metals desk. Left JPMorgan in December 2009.

Each of the defendants was charged with one count of racketeering conspiracy - also known as RICO conspiracy - among other federal crimes. Smith and Nowak were each charged with single counts of attempted price manipulation, commodities fraud, and spoofing.

"Smith, Nowak, Jordan, and their co-conspirators allegedly engaged in a complex scheme to trade precious metals in a way that negatively affected the natural balance of supply-and-demand," FBI assistant director in charge William F. Sweeney Jr. said in a statement.

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The defendants allegedly placed orders they intended to cancel just before execution. These "deceptive orders" were made to "create liquidity and drive prices toward orders they wanted to execute on the opposite side of the market," according to the indictment.

Two former JPMorgan metals traders described as "among the defendant's co-conspirators" already pled guilty to illegal spoofing in October 2018 and August 2019.

Nowak and Smith were placed on leave earlier in September pending the ongoing FBI investigation.

The case was indicted in the Northern District of Illinois and unsealed Monday.

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