Who would have thought that JPMorgan's precious metals trading desk is the functional equivalent of the mafia,and that its one-time leader,Blythe Masters,was the mafia's don?
Well,almost everyone who didn't mind being designated a conspiracy theorist for years.And now comes vindication,because this has just been confirmed by the DOJ,which accused the PM trading desks at JPMorgan of being deeply involved in what prosecutors described as a"massive,multiyear scheme to manipulate the market for precious metals futures contracts and defraud market participants."
好吧，几乎每一个不介意多年来被指定为阴谋论者的人。现在证明是正确的，因为美国司法部刚刚证实了这一点。司法部指控摩根大通的 PM 交易部门深度参与了检察官所说的"一场规模巨大的、持续多年的操纵贵金属期货合约市场的阴谋，并欺诈市场参与者"
In an indictment unsealed on Monday morning,the DoJ charged Michael Nowak,a JPMorgan veteran and former head of its precious metals trading desk and Gregg Smith,another trader on JPM's metals desk,in the probe.(Blythe Masters was somehow omitted).
在周一上午公布的一份起诉书中，美国司法部起诉了摩根大通资深人士、前贵金属交易部门主管迈克尔•诺瓦克(Michael Nowak)和摩根大通金属部门另一名交易员格雷格•史密斯(Gregg Smith)。(布莱斯·马斯特斯以某种方式被省略了)。
"Based on the fact that it was conduct that was widespread on the desk,it was engaged in in thousands of episodes over an eight-year period--that it is precisely the kind of conduct that the RICO statute is meant to punish,"Assistant Attorney General Brian Benczkowski told reporters.
Here's where it gets extra interesting:according to Bloomberg,the unusually aggressive language language embraced by prosecutors reminds legal experts of indictments utilizing the RICO Act-a law allowing prosecutors to take down'criminal enterprises'like the mafia by charging all members of the organization for any crimes committed by an individual on behalf of the organization.
Prosecutors charged the head of JP Morgan's global metals trading operation and two other traders with"conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity"-language that is typically used to describe a RICO charge.
This hints at the possibility of a deeper prosecution for JP Morgan.Already,12 people have been charged in the precious metals market-rigging conspiracy.
"We're going to follow the facts wherever they lead,whether it's across desks here or at any other bank or upwards into the financial institution,"Benczkowski said.
It's unclear what the DoJ is planning,but they're clearly keeping their options open.
Circling back to the indictment,both Smith and Nowak were put on leave over the summer as the DoJ's investigation neared its conclusion.
A third trader named in the indictment,Christopher Jordan,traded precious metals at JPM until he left in December 2009.He later traded precious metals at two other banks,Credit Suisse and First New York.
起诉书中提到的第三名交易员克里斯托弗•乔丹(Christopher Jordan)在摩根大通交易贵金属，直到2009年12月离职。后来，他在另外两家银行——瑞士信贷(Credit Suisse)和纽约第一银行(First New York)——交易贵金属。
In a press release accompanying the indictment,Assistant Attorney General accused all three men of scheming to manipulate the precious metals market while potentially harming their bank's clients.
"The defendants and others allegedly engaged in a massive,multiyear scheme to manipulate the market for precious metals futures contracts and defraud market participants,"said Assistant Attorney General Brian A.Benczkowski."These charges should leave no doubt that the Department is committed to prosecuting those who undermine the investing public's trust in the integrity of our commodities markets."
William Sweeney,the Assistant Director in Charge of the FBI's New York Field Office,added that this manipulation likely impacted"correlated markets and the clients of the bank they represented."
"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,"said FBI Assistant Director in Charge William F.Sweeney Jr.of the FBI's New York Field Office."Not only did their alleged behavior affect the markets for precious metals,but also correlated markets and the clients of the bank they represented.For as long as we continue to see this type of illegal activity in the marketplace,we'll remain dedicated to investigating and bringing to justice those who perpetrate these crimes."
"史密斯、诺瓦克、约旦和他们的同谋涉嫌参与了一个复杂的交易贵金属的计划，这种交易方式对供需的自然平衡产生了负面影响，"联邦调查局纽约办事处主管助理局长小威廉·f·斯威尼(William f.Sweeney jr.)说。"他们被指控的行为不仅影响了贵金属市场，还影响了相关市场和他们所代表银行的客户。只要我们继续看到这种市场上的非法活动，我们就将继续致力于调查并将犯下这些罪行的人绳之以法。"
According to Bloomberg,three other banks-Deutsche Bank,HSBC and UBS-agreed to pay$50 million(in total)to settle civil claims by the CFTC.Two former JPM employees who pleaded guilty and contributed evidence against their former colleagues that was used in the indictment.
据彭博社报道，另外三家银行——德意志银行、汇丰银行和瑞银集团——同意支付5000万美元(总额)来解决 CFTC 的民事诉讼。两名摩根大通前雇员承认有罪，并提供了起诉书中使用的针对他们以前同事的证据。
"While at JPMorgan I was instructed by supervisors and more senior traders to trade in a certain fashion,namely to place orders that I intended to cancel before execution,"said one former trader John Edmonds during an October 2018 hearing after pleading guilty to commodities fraud and conspiracy,BBG reports.
Bbg 报道称，一名前交易员约翰•埃德蒙兹(John Edmonds)在2018年10月的一次听证会上表示:"在摩根大通，我受到监管者和更资深的交易员的指示，以某种方式进行交易，即下达我打算在执行前取消的订单。"。
The behavior dates back more than 10 years to 2009,according to chat logs that were shown in the indictment.The conversations exposed in the chat logs show just how blatant the manipulation was,and how little the traders did to conceal it.
One of the traders who participated in the chat shown above was Christian Trunz,who traded precious metals at Bearn Stearns before joining JP Morgan after the crisis.He told a federal judge last month that this type of behavior was openly encouraged on JPM's trading desks for roughly a decade,and that other traders taught him how to do it.He pleaded guilty to federal fraud charges on Aug.20,BBG reports.
参与上述谈话的交易员之一是克里斯蒂安•特伦茨(Christian Trunz)，他在危机后加入摩根大通(JP Morgan)之前，曾在贝尔恩斯登(Bearn Stearns)交易贵金属。他上个月告诉一位联邦法官，这种行为在摩根大通的交易平台上被公开鼓励了大约十年，其他交易员教他如何做到这一点。据 BBG 报道，他于8月20日对联邦欺诈指控认罪。
Another trader said during a plea hearing that he was instructed to bid up the price of futures contracts by placing,then cancelling,bid orders(the literal definition of spoofing)that he never intended to fill.
"I was instructed that if a client wished to sell futures I should simultaneously place both bids and offers with the intent of canceling the bids prior to execution,"Edmonds said during his plea hearing.
Edmonds said the purpose was to falsely transmit liquidity and price information in order to deceive other market participants about the supply and demand so they would 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.
他表示:"我们制造了市场活动，人为地推高了销售价格，并诱使其它市场参与者以夸大的价格购买。"。埃德蒙兹于年月与 CFTC 达成了一项合作协议。
Since the crisis,regulators around the world have cracked down on manipulation in rates,forex and government bond markets,so it's not exactly a surprise that this type of behavior was also happening in precious metals.But the brazenness with which traders engaged in such manipulation suggests that they didn't know what they were doing was illegal or wrong,which,in at least some cases,is probably true.
The aggressiveness of this manipulation probe is notable given that the government has lost the last two manipulation cases in court.The DoJ is trying to show that it is"undeterred and are becoming more,not less,aggressive"in cracking down on market manipulation."
Read the full indictment below: