Two traders at the US’s biggest bank will serve time for fraudulent market manipulation.
A federal judge in Chicago yesterday (22 August) sentenced two former JPMorgan Chase metals traders to prison for their roles in a long-running scheme to manipulate the prices of gold and silver.
Michael Nowak, who was the head of the bank’s precious-metals desk, and Gregg Smith, who was his top trader, were convicted of spoofing, fraud and attempted market manipulation at a trial last year. Spoofing, despite its innocuous-sounding moniker, is a highly illegal practice where traders place fake orders to create a false impression of supply and demand and then cancel them before they are executed. The court found that Smith and Nowak had engaged in tens of thousands of deceptive trades for gold, silver, platinum and palladium futures contracts traded through the New York Mercantile Exchange and the Commodity Exchange.