(Bloomberg) - Michael Nowak was “the boss” of a plot at JPMorgan Chase & Co. to manipulate gold and silver prices and worked with the top trader and salesman on the bank’s precious metals desk to “spoof” markets with bogus buy and sell orders, a federal prosecutor told jurors in Chicago.
“For years, executives at one of the world’s largest banks conspired to manipulate the markets for precious metals,” Matthew Sullivan, an attorney in the US Department of Justice, said Thursday during closing arguments in the trial of Nowak, Gregg Smith and Jeffrey Ruffo. “All three worked together toward the same goal: earning profits for the precious-metals desk by spoofing.”
Prosecutors are wrapping up the biggest criminal case by the US in its crackdown on market manipulation following the global financial crisis. Nowak and Smith are charged with racketeering conspiracy as well as conspiring to commit price manipulation, wire fraud, commodities fraud and spoofing from 2008 to 2016. Ruffo is charged with racketeering and conspiracy. They face years in prison if convicted.
Over the past three weeks, government witnesses described how Nowak, who ran the desk, and Smith, its chief gold trader, routinely placed huge buy and sell orders they never intended to execute. It was part of their strategy to push prices in the direction that would profit the bank, said two former JPMorgan traders who agreed to cooperate after pleading guilty. Ruffo encouraged the practice to benefit his hedge fund clients, they said.
JPMorgan, one of the most influential banks in the precious-metals market, already has paid $920 million to settle Justice Department spoofing allegations against it.
Prosecutors are wrapping up the biggest criminal case by the US in its crackdown on market manipulation following the global financial crisis. Nowak and Smith are charged with racketeering conspiracy as well as conspiring to commit price manipulation, wire fraud, commodities fraud and spoofing from 2008 to 2016. Ruffo is charged with racketeering and conspiracy. They face years in prison if convicted.
Over the past three weeks, government witnesses described how Nowak, who ran the desk, and Smith, its chief gold trader, routinely placed huge buy and sell orders they never intended to execute. It was part of their strategy to push prices in the direction that would profit the bank, said two former JPMorgan traders who agreed to cooperate after pleading guilty. Ruffo encouraged the practice to benefit his hedge fund clients, they said.
JPMorgan, one of the most influential banks in the precious-metals market, already has paid $920 million to settle Justice Department spoofing allegations against it.
By Joe Deaux and Tom Schoenberg
