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JPMorgan metals taders jailed over market manipulation scheme

Two former precious metals traders at JPMorgan Chase have been sentenced to prison for engaging in fraud, attempted price manipulation, and spoofing as part of a market manipulation scheme that spanned over eight years, involved tens of thousands of unlawful trading sequences, and resulted in over $10 million in losses to market participants.

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JPMorgan metals taders jailed over market manipulation scheme


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Gregg Smith, Morgan’s former head of global precious metals business, was sentenced to two years in prison and a $50,000 fine. Head gold trader Michael Nowak was sentenced to one year and one day in prison and a $35,000 fine.

“The defendants used their positions as some of the most powerful traders in the worldwide precious metals markets to engage in an egregious effort to manipulate prices for their benefit,” says acting assistant attorney general Nicole Argentieri. “This case reaffirms the Department’s steadfast commitment to hold accountable those who engage in fraud and manipulation that undermines the investing public’s trust in the integrity of our commodities markets.”

According to court documents, between approximately May 2008 and August 2016, Smith and Nowak, along with other traders on the JPMorgan precious metals desk, engaged in widespread spoofing and market manipulation, placing orders and then cancelling them to drive up prices.

All told, Smith and Nowak engaged in tens of thousands of deceptive trading sequences for gold, silver, platinum, and palladium futures contracts traded through the New York Mercantile Exchange and Commodity Exchange.

In September 2020, JPMorgan admitted to committing wire fraud in connection unlawful trading in the markets for precious metals futures contracts, in US Treasury futures contracts and in the secondary acash market for US Treasury notes and bonds. The bank entered into a three-year deferred prosecution agreement through which it paid more than $920 million in fines.

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