The JPMorgan spoofer sentencing has now been delayed according to the latest Bloomberg report published on Thursday.
“A federal judge delayed until next week the sentencing of two former JPMorgan Chase & Co. gold traders convicted last year of spoofing, fraud and attempted market manipulation, so he can review issues raised by defense lawyers hoping to keep their clients out of prison.
Prosecutors had sought a sentence of five years behind bars for Michael Nowak, who ran JPMorgan’s precious-metals trading desk, and six years for Gregg Smith, the bank’s top gold trader.
But during a nearly three-hour hearing Thursday in Chicago federal court, attorneys argued over how to measure, in dollars, the harm to victims of deceptive trading by Nowak and Smith.
US District Judge Edmond Chang, who presided at their trial in August 2022, said he needed at least until next week to review the arguments and the law. New sentencing dates weren’t set, but the judge said the soonest would be next Wednesday.
The JPMorgan case was part of a crackdown by federal prosecutors on illegal spoofing, where traders place bogus orders to move prices up or down and then quickly cancel them before they can be executed. Smith and Nowak used the technique to manipulate gold and silver prices from 2008 to 2016.”
The case is US v. Smith et al, 19-cr-00669, US District Court, Northern District of Illinois (Chicago).
Ex-JPMorgan Gold Spoofers Update
Another person involved is Christopher Jordan, who was convicted of wire fraud affecting a financial institution by a federal judge in Chicago, the latest win for U.S prosecutors in their crackdown on illegal “spoofing” trades and market manipulation.
Jordan was found guilty Friday after a four-day trial in the same courthouse where two of his most senior colleagues on the JPMorgan precious metals desk were convicted in August of spoofing related charges for deceptive buy and sell orders.
Between 2008 and 2010, Jordan placed thousands of spoof orders, i.e., orders that he intended to cancel before execution, to drive prices in a direction more favorable to orders he intended to execute on the opposite side of the market.
Jordan engaged in this deceptive spoofing strategy while trading gold and silver futures contracts on the Commodity Exchange (COMEX), which is a commodities exchange operated by the CME Group.
These deceptive orders were intended to inject false and misleading information about the genuine supply and demand for gold and silver futures contracts into the markets.
He is scheduled to be sentenced at a later date and faces a maximum penalty of 30 years in prison.
Four other former JPMorgan precious metals traders were previously convicted in related cases.
In August 2022, Gregg Smith and Michael Nowak were convicted after trial in the Northern District of Illinois of wire fraud affecting a financial institution, commodities fraud, attempted price manipulation, and spoofing.
In September 2020, JPMorgan admitted to committing wire fraud in connection with (1) unlawful trading in the markets for precious metals futures contracts and (2) unlawful trading in the markets for U.S. Treasury futures contracts and in the secondary (cash) market for U.S. Treasury notes and bonds.
JPMorgan entered into a three-year deferred prosecution agreement pursuant to which it paid more than $920 million in criminal monetary penalties, criminal disgorgement, and victim compensation, with parallel resolutions by the Commodity Futures Trading Commission and the Securities Exchange Commission announced on the same day.
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