Amr Alfiky/Reuters
- JPMorgan is set to pay almost $1 billion to settle charges from US regulators of spoofing in precious metals and Treasury markets, Bloomberg reported on Wednesday.
- The payment would resolve investigations by the Justice Department, the Commodity Futures Trading Commission, and the Securities and Exchange Commission.
- The nearly $1 billion sum would be a record spoofing-related settlement and would more closely resemble past penalties for other forms of market manipulation, Bloomberg said.
- Spoofing involves making several orders in a market without the intention of filling them, often to mislead other traders into pushing prices in a certain direction.
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JPMorgan is set to pay nearly $1 billion to settle with US authorities investigating whether the bank manipulated the metals and Treasury markets, Bloomberg reported on Wednesday.
The sum would set a record for spoofing-related settlements and could be announced as soon as this week, sources familiar with the matter told Bloomberg. The payment would be in line with other market-manipulation sanctions but surpass previous spoofing fines.
The payment would resolve investigations by the Justice Department, the Commodity Futures Trading Commission, and the Securities and Exchange Commission, according to the report. The agencies have been looking into whether traders on JPMorgan’s metals-futures and Treasury desks interfered with the respective markets.
Spoofing is a form of market manipulation that typically involves traders making many orders they have no intention of executing; that can mislead market participants to steer prices in a certain direction. Though the underlying act of making several trades isn’t illegal, regulators outlawed the strategic use of such trades in 2010 through the Dodd-Frank Act.
One source told Bloomberg that the settlement wasn’t likely to restrict JPMorgan’s business practices and that the bank would admit wrongdoing.
In criminal charges against JPMorgan filed last year, the Justice Department alleged that employees on the bank’s precious-metals desk turned the venture into an enterprise that frequently conducted illegal market activity.
After charges were brought against Michael Nowak, the former head of the precious-metals desk, JPMorgan learned of a separate investigation into its Treasury desk, Bloomberg reported.
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