JP Morgan Spoofing

11.12.2018

JP Morgan Chase COMEX/NYMEX Precious Metals Spoofing Lawsuit Investigation

Our securities attorneys are investigating commodities market manipulation claims on behalf of purchasers or sellers of NYMEX platinum or palladium futures contracts and/or COMEX silver futures or gold futures contracts, or any options on those futures contracts.

Did you purchase or sell NYMEX platinum or palladium futures contracts, COMEX silver or gold futures contracts, or any options on those futures contracts between January 1, 2009 and December 31, 2015?

You may have a legal claim. Speak to a securities and investments attorney about your legal rights.

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The Department of Justice Guilty Plea

On November 5, 2018, the United States Department of Justice unsealed a plea agreement revealing that John Edmonds, a JP Morgan trader, admitted to conspiring with others at the bank between 2009 and 2015 to “spoof” orders for precious metals futures contracts.

According to the DOJ, Edmonds routinely manipulated the prices of gold, silver, platinum and palladium by placing orders that were quickly cancelled before the trades were executed, a price-distorting practice known as spoofing. Edmonds pleaded guilty to one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, commodities price manipulation and spoofing.

According to CNBC, the spoofing practices were not limited to Edmonds, but also included other JP Morgan traders. CNBC reports that Edmonds learned the spoofing practice—placing orders that were never intended to be executed—from senior JP Morgan traders, and that his supervisors knew of his actions.

According to Assistant Attorney General Brian Benczkowski:

“For years, John Edmonds engaged in a sophisticated scheme to manipulate the market for precious metals futures contracts for his own gain by placing orders that were never intended to be executed.”

FBI Assistant Director in Charge William F. Sweeney, Jr., stated:

“By conspiring with his trading partners to place spoof orders, [Edmonds] blatantly attempted to profit off of an unfair market that he helped create.”

Read the DOJ’s press release here.

What is Spoofing?

Spoofing is the practice of knowingly bidding and offering trades with the intent to cancel the bid and offer—often within seconds—before the trades are executed. The spoofed orders alter the appearance of supply and demand and manipulate markets which are otherwise efficient. Spoofing is intended to entice other traders to base their investment decisions on the false perception of supply and demand created by the spoofing conduct.

According to the DOJ, the JP Morgan case is the result of an ongoing investigation into spoofing practices.

Did you purchase or sell NYMEX and COMEX precious metals?

You may have a legal claim. Speak to a securities and investments attorney about your rights by calling 1.866.981.4800 or filling out the form at the top of the page.

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Girard Sharp LLP represents consumers, investors, and institutions in class actions and other complex litigation nationwide. Our class action lawyers have obtained multimillion-dollar recoveries for victims of unfair and deceptive practices in antitrust, financial fraud, and consumer protection matters against some of the country’s largest corporations (including Raymond James, John Hancock, Sears, Yahoo, and JP Morgan Chase). Girard Sharp LLP has earned top tier rankings from U.S. News and World Report for Securities and Class Action Litigation and was selected as a 2018 Elite Trial Lawyers finalist by the National Law Journal.

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