US charges JPMorgan precious metals traders over alleged market manipulation
- Nowak and Smith had been placed on leave from the bank pending the ongoing investigation.
- It’s truly regrettable that the DOJ decided to go forward with a prosecution of Mike Nowak, who has done nothing wrong. We look forward to representing him at trial and expect him to be fully exonerated.”
WASHINGTON: Two current and one former JPMorgan Chase & Co executives were charged over allegedly participating in market manipulation in the trade of precious metals including gold, silver, platinum and palladium between 2008 and 2016, the Department of Justice said on Monday.
The three men – global precious metals desk head Michael Nowak, precious metals trader Gregg Smith, and former trader Christopher Jordan, who left JPMorgan in 2009 – were charged with a racketeering conspiracy and other federal crimes, it said in a statement.
A spokesman for JPMorgan declined to comment. One of the largest gold traders in the world, the bank said in an August regulatory filing it was “responding to and cooperating with” investigations by various authorities, including the Department of Justice, relating to trading practices in the metals markets.
Reuters reported on Sept. 12 that Nowak and Smith had been placed on leave from the bank pending the ongoing investigation.
“It’s truly regrettable that the DOJ decided to go forward with a prosecution of Mike Nowak, who has done nothing wrong. We look forward to representing him at trial and expect him to be fully exonerated,” Nowak’s attorneys, David Meister and Jocelyn Strauber of Skadden, Arps, Slate, Meagher & Flom LLP, said in an emailed statement.
Smith and Jordan did not immediately respond to requests for comment.
The defendants “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,” Federal Bureau of Investigation (FBI) Assistant Director William Sweeney said in the statement.
“Not only did their alleged behavior affect the markets for precious metals, but also correlated markets and the clients of the bank they represented,” said Sweeney, who works in the FBI’s New York Field Office.
The case was filed with the US District Court in the Northern District of Illinois, and was unsealed on Monday, the Department of Justice said.
Two former JPMorgan metals traders have already pleaded guilty to illegal spoofing activity.