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3 JPMorgan traders charged in alleged price scheme



The alleged behavior lasted for eight years, the Justice Department said Monday.

The government sued Gregg Smith, a CEO, and Michael Nowak, CEO and chief of the bank's global precious metal desk. Both were current employees as of Monday morning, authorities say.

The third defendant is Christopher Jordan, a former employee of JPMorgan.

JPMorgan declined to comment Monday. Instead, it referred to a previous public filing saying it "responds to and cooperates with these investigations."

Between 2008 and 2016, Smith, Nowak and Jordan manipulated alleged prices of gold, silver, platinum and palladium futures on the New York Mercantile Exchange and the CME Commodity Exchange.

"Smith, Nowak, Jordan, and their associates allegedly engaged in a complex scheme to trade precious metals in a way that adversely affected the natural balance of supply and demand," said William F. Sweeney Jr., FBI. Deputy Director in charge of the FBI's field office in New York, in a statement.

Nowak's attorney, David Meister and Jocelyn Strauber, said in an email statement, "It is truly regrettable that the DOJ decided to proceed with a prosecution of Mike Nowak, who has done nothing wrong. We look forward to

Smith's legal representative declined to comment, while Jordan's representative did not return emails seeking comment.

The government claims the defendants are "widespread fraud, market manipulation and fraud" by placing order orders they planned to cancel before executing them, according to a statement from the Justice Department. The goal "was to trick" other traders into buying and selling futures contracts at prices and at times they did not would do something else, the Justice Department claims.

"We will follow the facts wherever they lead, either further up the banks or to other institutions," the Deputy Assistant Secretary said attorney Brian A. Benczkowski in a conversation with reporters.

The US Commodity Futures Trading Commission also filed a civil enforcement action against Smith and Nowak on Monday.

The Justice Department said the charge is the latest in a series of cases involving merchandise fraud that have resulted in eight guilty pleas and one prison sentence in 36 months, with half a dozen others pending. One case ended in acquittal and one in a lawsuit.


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