Ex-JPMorgan traders face trial on racketeering charges
(Reuters) — Three former JPMorgan Chase & Co employees face a federal trial in Chicago on Friday on accusations they helped turn their trading desk into a criminal enterprise that faked precious metals futures orders to manipulate prices.
The bank's former global precious metals desk head Michael Nowak, precious metals trader Gregg Smith and salesperson Jeffrey Ruffo are charged with racketeering and conspiracy in the U.S. Justice Department's most aggressive case to date targeting the manipulative trading tactic known as spoofing.
The tactic involves placing and then quickly canceling buy or sell orders to falsely create the impression of high demand or supply. The three men are accused of using the tactic to manipulate futures on metals such as gold, silver, platinum and palladium between 2008 and 2016.
Attorneys for the defendants did not reply to a request for comment on Thursday.
Spoofing was outlawed in 2010 when Congress passed the Dodd-Frank Act after the financial crisis. Since then, prosecutors have argued that earlier instances constituted fraud.
In addition to racketeering and conspiracy, Mr. Nowak faces 13 other charges including fraud, spoofing and attempted market manipulation, and Mr. Smith faces 11 additional charges.
Christopher Jordan, a trader who left JPMorgan in 2009, has also been charged and will be tried separately.
