Edmonds said the purpose was to falsely transmit liquidity and price information in order to deceive other market participants about the supply and demand. This would spur those participants to trade against the orders that JPMorgan wanted to execute.
“We created market activity which artificially drove the sale price up and induced other market participants to purchase at an inflated price,” he said. Edmonds entered into a cooperation agreement with the CFTC in July.
Christiaan Trunz, a former trader for Bear Stearns and JPMorgan, told a federal judge in Manhattan last month that spoofing trades of precious metals was rampant at the bank for nearly a decade and that he was taught how to do it from other traders at JPMorgan. Trunz, who pleaded guilty on Aug. 20 to two federal fraud charges, said he manipulated futures markets for gold, silver, platinum and palladium from offices in New York, London and Singapore from 2007 to 2016.
After Edmonds pleaded guilty, JPMorgan was hit with a proposed class action lawsuit by investors that also names Nowak and another onetime managing director, Robert Gottlieb. Gottlieb didn’t respond to a request for comment.
That civil case was put on hold in February after the Justice Department intervened, claiming that the litigation could harm its criminal investigation.
This article was provided by Bloomberg News.