The sanction is a record for identity theft, that is, when sophisticated traders flood the markets with orders that they do not intend to actually execute. The practice was banned after the 2008 financial crisis and regulators made it a priority for eradication.
In a statement, Berkovitz said he opposed his agency’s decision that JPMorgan’s actions “should not result in any disqualification under the ‘bad actors’ provisions of securities laws.” He apparently refers to the fact that the regulation should not result in trade restrictions in other areas of the business.
“For eight years, a group of JPMorgan traders have systematically ‘usurped’ the precious metals and treasury futures markets by entering hundreds of thousands of orders with the intention of canceling them before they were executed,” Berkovitz said. . “The Board Order finds that JPMorgan has manipulated these markets and failed to diligently supervise its traders. ”
A spokesperson for JPMorgan declined to comment on the CFTC’s statement.
The bank also quietly settled a long-standing lawsuit that accused the bank of manipulating the precious metals markets with “spoofing” transactions. The lawsuit was filed in 2015 by Daniel Shak, the hedge fund operator and high-stakes poker player, and two metal traders, Mark Grumet and Thomas Wacker.
The three plaintiffs accused JP Morgan of manipulating the silver futures market from 2010 to 2011 through fraudulent transactions.
Details of the settlement were not disclosed in court documents.
This story is developing. Please come back for updates.