Tag: Spoofing

Ex-JPMorgan Gold Trader Faces 30 Years in Prison for Spoofing

Market News: Ex-JPMorgan Gold Trader faces time in prison after spoofing the market.
Market News: Ex-JPMorgan Gold Trader faces time in prison after spoofing the market.

An Ex-JPMorgan Gold trader was found guilty of fraud in the commodities market.

Christopher Jordan 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.

Jordan worked at JPMorgan from 2006 to late 2009.

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Department of Justice Comments on JPMorgan Trader

DOJ report on Ex-JPMorgan Trader spoofing the gold market.
DOJ report on Ex-JPMorgan Trader spoofing the gold market.

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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Source(s): Bloomberg, Justice.Gov.


Biotech Company Suing Citadel Over Market Manipulation

Citadel Market Manipulation
Market News: Biotech Company sues Citadel for market manipulation.

Biotech company Northwest Biotherapeutics is suing Citadel and other market makers for allegedly manipulating its stock price.

The company is accusing Citadel Securities LLC, Susquehanna, Virtu, and other Wall Street firms of driving its stock price down through the use of various illicit trading activities.

One being ‘spoofing‘ orders.

The lawsuit was filed on Thursday in Manhattan federal court. 

Northwest Biotherapeutics alleged the market makers had repeatedly engaged in “spoofing,“ where traders place orders with an intent to fool other investors about a stock’s demand and manipulate the price.

Northwest, whose shares trade over the counter, also sued Canaccord Genuity Inc., G1 Execution Services LLC, GTS Securities LLC, Instinet LLC, Lime Trading Corp. and Virtu Americas LLC.

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Citadel’s Market Manipulation History

Citadel market manipulation
Stock Market News: Citadel accused of market manipulation | Citadel lawsuit + more.

The lawsuit comes as no surprise to the retail community as Citadel has a long history of market manipulation.

From getting accounts suspended in China to settling charges of misconduct and abusing their power in the U.S. markets, Citadel has done it all.

Spoofing was outlawed in 2010 so the practice has since been illegal.

In March, the DOJ targeted hedge fund Muddy Waters for flooding the market with fake shares.

In August, a federal jury in Chicago convicted two former JPMorgan traders who had been charged with spoofing in the gold market.

Now Citadel and others are being accused of using spoofing tactics to drive down the price of Northwest Biotherapeutics.

Will these Wall Street giants receive the same consequences as JPMorgan’s former traders?

I’m curious to know what you think.

Leave your thoughts in the comment section down below.

Related: How Bloomberg’s Beloved Citadel Securities Manipulates the Market

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Source: WSJ


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