Former JPMorgan Chase Executive Sentenced to Prison for Market Manipulation

Former JPMorgan Chase Executive Sentenced to Prison for Market Manipulation

Former JPMorgan Chase executive Gregg Smith has been sentenced to nearly two years in prison for his involvement in manipulating gold and silver prices from 2008 to 2016. Smith, who worked on the bank’s precious-metals desk, was convicted on 11 charges related to market manipulation. His boss, Michael Nowak, was also convicted and received a sentence of one year and one day.

Smith, described as “the most prolific ‘spoofer’ that the government has prosecuted to date,” orchestrated an illegal scheme by placing bogus market orders with no intention of carrying out the transactions. This practice, known as spoofing, manipulates market prices and violates the Securities and Exchange Commission’s rules.

Chicago US District Judge Edmond Chang announced that Smith will begin his sentence on January 15. During the sentencing, Judge Chang criticized Smith for injecting fraud into the market and told him that he had told many lies to the market.

Smith’s lawyer has stated plans to appeal the conviction. Prosecutors initially sought a six-year prison term for Smith, but it was later revised to 23 months for undisclosed reasons. Smith’s legal counsel argued that their client should be spared prison, claiming he did not personally benefit from his illicit actions.

This sentencing follows the accusations against three other former JPMorgan precious metals traders, John Edmonds, Christian Trunz, and Jeffrey Ruffo, who were also involved in manipulating international markets for gold and silver. Edmonds, the first to plead guilty to market manipulation in 2018, testified against his former colleagues during Smith’s trial. He claimed that spoofing trades was an open strategy on the desk and that making money was the priority.

JPMorgan paid $1 billion in fines in 2020 for the fraudulent activities conducted by its precious metals desk.

 

CrimeDoor
Author: CrimeDoor

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