JPMorgan Chase’s metal trading desk is facing allegations of several trades involving fixing of precious metal prices. The US Department of Justice has already charged three individuals in gold and precious metals for market manipulation. The alleged manipulation spanned around eight years, according to the Department of Justice.
On September 16th, Bloomberg reported that prosecutors had invoked the racketeering law (RICO) against the bank’s metals desk. They referred to the metals desk as a criminal enterprise. Employees at the desk engaged in several illegal moves aimed at fixing the price of precious metals and thus defraud investors.
The charged individuals include Michael Nowak, a managing director and JPMorgan Chase global head of metals desk, and Gregg Smith, an executive director. Both are currently employees of the company, and the third is a former employee Christopher Jordan. From 2008 through 2016 they manipulated prices of silver, gold, platinum as well as palladium futures offered on the CME commodity Exchange and New York Mercantile Exchange.
JPMorgan to receive Punishment under the RICO statute
Assistant Attorney General, Brian Benczkowski said that the scheme was complex and widespread at the metals desk. He said that the conduct happened in several episodes for almost a decade, and this is behavior that the RICO statute should punish. RICO usually applies in extreme cases of organized crime rings. Former prosecutors have hailed the move by the Department of Justice against the bank. Prosecutors indicate that several employees were involved in the scheme and so far two have accepted wrongdoing and are cooperating with authorities.
The allegations come at a time when the regulators have been critical about cryptocurrencies such as Bitcoin manipulating the market. However, cryptocurrency supporters have quickly pointed out the irony in the situation. Over the years, Jamie Dimon, the CEO of JPMorgan Chase, has been one of the most vocal Bitcoin critics. In September 2017, he referred to the coin as a fraud.