(Kitco News) A federal jury in Chicago convicted an ex-JPMorgan gold and silver trader after he was charged with wire fraud.
This is another successful win for U.S. prosecutors in their fight against "spoofing" — a tactic of manipulating the gold and silver markets by making bids and canceling them before execution while also placing orders on the opposite side.
The trader, Christopher Jordan, was convicted on Friday following a quick four-day trial. Jordan was employed with JPMorgan between 2006 and 2009.
The proceedings took place in the same location as this summer's three-week trial in which two out of three former JPMorgan Chase & Co employees were also convicted after being charged with manipulating gold prices for years.
Jordan was found guilty of using similar "spoofing" techniques of placing big orders that were never intended to be filled. After placing them, he quickly canceled and made trades on the other side of the market, thereby getting a better price, Bloomberg cited prosecutors as saying.
The sentencing is scheduled for May of next year.
This acts as a "scheme to rig gold and silver markets in his favor," said Assistant U.S. Attorney Lisa Beth Jennings in her closing statement. "The spoof orders the defendant placed tricked other traders."
Jordan's defense lawyer expressed his disappointment James Benjamin: "Chris Jordan is a good and honorable man who did his job in good faith," he said.
Back in August, the Chicago jury came out with a guilty verdict for JPMorgan's former top gold trader Gregg Smith and the bank's former head of the precious-metals desk Michael Nowak. The conviction included charges of price manipulation, spoofing, and wire fraud. Smith was convicted on 11 charges, and Nowak was convicted on 13 charges.
Jeffrey Ruffo, the bank's former executive director specializing in hedge fund sales, was acquitted. All three defendants pleaded not guilty.
This was one of the Justice Department's most aggressive prosecutions to date that dealt with spoofing in the gold futures market.
In 2020, JPMorgan agreed to settle the Justice Department's spoofing allegations by paying $920 million.