A man is reflected in a sign outside the JPMorgan Chase headquarters in New York City.
JPMorgan Chase is on the verge of paying nearly $ 1 billion to resolve a government investigation into alleged manipulation of the metals and treasure markets, according to one knowledgeable person.
According to Bloomberg, who first reported on the fine, an agreement between JPMorgan of New York and several US authorities could be reached as early as this week. The deal would solve the investigation by the Department of Justice, the Commodity Futures Trading Commission, and the Securities and Exchange Commission.
A penalty of this size would be a record for spoofing when discerning traders flood the markets with orders they do not actually want to execute. The practice was banned after the 2008 financial crisis, and regulators have made it a priority to stamp it out.
While JPMorgan may have to admit wrongdoing in the settlement, the deal is not expected to result in business restrictions in other areas of the company, said the person who refused to be identified, speaking of a state investigation. Spokesmen for the bank and the DOJ declined to comment.
The case was exposed in September 2019 when a 14-point indictment against three current or former JPMorgan employees, including the global head of base and precious metals trading, was overturned.
The indictment alleges that the dealers, along with eight unnamed co-conspirators who worked in JPMorgan's offices in New York, London and Singapore, were involved in a conspiracy related to a multi-year program to manipulate precious metals markets and defraud customers took part.
The indictment named Michael Nowak, a former chief executive who also ran the company's global precious metals counter, and Gregg Smith and Christopher Jordan, both of whom held the title of executive director and were traders at the company's precious metals counter.
They were each charged with conspiracy under the Racketeer Influenced and Corrupt Organizations Act [RICO], which has been used in the past in prosecuting Mafia as well as other federal crimes related to manipulating precious metals futures markets.
Nowak and several others in the case pleaded not guilty and moved to dismiss the charges, while others worked with the authorities.