Three JPMorgan employees, some of whom were executives, were indicted on charges related to making fake orders of gold, silver and other metals to trick the market, federal Department of Justice announced Monday.
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Gregg Smith, 55, Michael Nowak, 45, and Christopher Jordan, 47 and other co-conspirators allegedly manipulated the market by placing orders that they later canceled, in turn deceiving other participants about the actual supply and demand of the precious metals between May 2008 and August 2016, while they worked for JPMorgan’s global precious metals trading desk, the DOJ said.
“Smith, Nowak, Jordan, and their co-conspirators allegedly engaged in a complex scheme to trade precious metals in a way that negatively affected the natural balance of supply-and-demand,” William F. Sweeney Jr., assistant director-in-charge of the FBI’s New York Field Office, said. “Not only did their alleged behavior affect the markets for precious metals, but also correlated markets and the clients of the bank they represented.”
Smith, of New York, and Nowak, of New Jersey, were previously placed on leave pending the outcome of the investigation, Reuters reported. Jordan, of New Jersey, stopped working for JPMorgan in 2009.
In an emailed statement to FOX Business, Nowak’s attorneys said their client “has done nothing wrong.”
“It’s truly regrettable that the DOJ decided to go forward with a prosecution of Mike Nowak,” said lawyers David Meister and Jocelyn Strauber. “We look forward to representing him at trial and expect him to be fully exonerated.”
Each of the three JP Morgan employees was hit with charges of conspiracy to commit wire fraud affecting a financial institution, bank fraud, commodities fraud, price manipulation and spoofing; bank fraud; wire fraud affecting a financial institution; and conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity, often known as RICO conspiracy, the DOJ said.
A spokesperson for JPMorgan did not immediately respond to FOX Business‘s request for comment.
“Spoofing” is the act of placing an order to buy or sell with no intention to following through on the actual order.
Smith, an executive director and trader for the metal desk, and Nowak, a managing director who headed the precious metals desk, were also each charged with one count of attempted price manipulation, one count of spoofing and one count of commodities fraud.
All three men are due to appear Monday in federal courts in New York or New Jersey.
Two other co-conspirators have already pleaded guilty in connection to the scheme.