An ex-JPMorgan market manipulator now says he was wrongfully fired after being let go in relations to spoofing cocoa trades.
The former commodities trader at JPMorgan Chase & Co. has initiated legal proceedings against the investment bank, alleging wrongful termination related to accusations of spoofing cocoa trades.
Phil Remillard filed his claim at a London employment tribunal, asserting that JPMorgan’s actions were influenced by a desire to appease regulators following a high-profile spoofing scandal that had previously plagued the bank.
In his lawsuit, Remillard seeks reinstatement to his former position, echoing the successful argument made by his ex-colleague Bradley Jones.
Jones had also faced similar allegations and emerged victorious in a tribunal ruling that not only cleared him of wrongdoing but also awarded him over £1.6 million (approximately $2 million) in back pay.
The allegations against Remillard involve claims that he executed cocoa futures trades on 12 separate occasions in 2018, only to cancel those trades before they could be executed.
He has vehemently denied these accusations, contending that during his disciplinary proceedings, the burden of proof unfairly shifted to him.
He believes that the U.S. regulators intensified their scrutiny of JPMorgan after the bank agreed to pay $920 million to settle charges of market manipulation.
In court filings, JPMorgan executives argued that Remillard’s trading activities were likely to have misled the market.
Spoofing, as defined in the financial industry, occurs when a trader places an order with the intention of canceling it before execution, thereby creating a misleading impression of market demand.
“The impact of my dismissal has been devastating to me and extremely demoralizing,” Remillard remarked in his witness statement.
“I am concerned that I was put through this ordeal simply so JPMorgan could demonstrate to the Department of Justice (DOJ) that it had taken decisive action against a trader with a history of spoofing.”
While the maximum award for unfair dismissal cases in the UK is capped at £105,700, employees who are reinstated may qualify for larger compensatory amounts.
In Jones’ case, he not only proved he had not engaged in spoofing but also successfully argued for his reinstatement, resulting in one of the largest payouts recorded in such cases, per Bloomberg.
Remillard noted parallels between his situation and that of Jones, revealing that some of the managers involved in his dismissal were also connected to the earlier case.
His disciplinary issues date back to 2021, when JPMorgan re-evaluated its trading surveillance practices after expressing concerns about inadequately monitored trading activities.
By that time, Remillard had transitioned to trading precious metals and learned that his 2018 trades had flagged for further review.
JPMorgan executive Jason Sippel, in a witness statement, detailed that Remillard had utilized a trading strategy known as an “iceberg order,” where only a portion of the total order is visible to the market.
Sippel asserted that Remillard would often place a large order in the opposite direction and subsequently cancel the visible portion of the order.
“Some of his trading activity had the classic hallmarks of spoofing,” Sippel explained.
“It is unusual to observe this trading pattern, as traders are typically cautious about appearing to engage in such practices due to the negative perceptions it can create.”
In response, Remillard argued that the fast-paced environment of trading made it difficult to recall specific reasons behind individual trading decisions.
He claimed that he often canceled orders in response to market shifts and maintained that he typically executed around 100 to 200 trades each day.
Cocoa futures represent a relatively small market compared to other major commodities like oil and gold, with production concentrated in a narrow belt of equatorial countries, making it susceptible to price volatility.
This year, cocoa prices in New York have surged, more than doubling and reaching record highs in April.
Despite his defense, Sippel expressed a firm belief that the evidence against Remillard was compelling.
“I would have preferred to find a way to exonerate Phil, but the weight of evidence clearly indicated that he had been spoofing,” Sippel stated.
“I concluded that the only appropriate sanction for this gross misconduct was summary dismissal.”
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Also Read: JPMorgan To Now Pay SEC $151 Million in Violations
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