JPMorgan’s Gold And Silver Manipulation “Crime Ring”
October 1st, 2020Via: ZeroHedge:
There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back.
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All that changed in November 2018 when a former JPMorgan precious-metals trader admitted he engaged in a six-year spoofing scheme that defrauded investors in gold, silver, platinum, and palladium futures contracts. John Edmonds, then 36, pled guilty under seal in the District of Connecticut to commodities fraud, conspiracy to commit wire fraud, commodities price manipulation, and spoofing, a trading technique whereby traders flood the market with “fake” bids or asks to push the price of a given futures contract up or down toward a more advantageous price, and to confuse other traders or HFTs which respond to trader intentions by launching momentum in the other direction. As FBI Assistant Director in Charge Sweeney explained at the time, “with his guilty plea, Edmonds admitted he intended to introduce materially false and misleading information into the commodities markets.”
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“Our business is a client-driven business where we execute on behalf of clients to help them with their…risk management objectives,” Blythe Masters said before going on to claim that the bank runs a “balanced book”, where its long and short positions are always evened out. But the punchline was when Master, who is perhaps best known for discovering the Credit Default Swap, said that manipulating markets to benefit the bank’s positions to the detriment of clients would be “wrong, and we don’t do it.”
Oops.
Masters quietly quit JPM two years later – perhaps sensing that the regulators are starting to sniff around the precious metals business and just after she was named by FERC for organizing the manipulation of power markets in California and the Midwest (JPM settled for $410 million). Unfortunately for her former subordinate, Mike Nowak, who until recently was the top JPM precious metals trader, he is now in the crosshairs of a unprecedented RICO case alleging his trading desk operated like an ongoing criminal conspiracy due to its abuse of “spoofing” a strategy that has been blamed as illegal market manipulation that may have caused the 2010 flash crash. But more on Blythe in a second.
