JPMorgan to pay $920m after admitting traders manipulated markets in 'spoofing' case

JPMorgan Chase admitted wrongdoing and agreed to pay more than $920 million to resolve US authorities’ claims of market manipulation involving two of the bank’s trading desks, the largest sanction ever tied to the illegal practice known as spoofing.

Over eight years, 15 traders at the biggest US bank caused losses of more than $300m to other participants in precious metals and Treasury markets, according to court filings on Tuesday. JPMorgan admitted responsibility for the traders’ actions. The Justice Department filed two counts of wire fraud against the bank’s parent company but agreed to defer prosecution related to the charges under a three-year deal that requires the bank to report its remediation and compliance efforts to the government.

The New York-based lender will pay the biggest monetary penalty ever imposed by the Commodity Futures Trading Commission, including a $436.4m fine, $311.7m in restitution and more than $172m in disgorgement, according to a CFTC statement. The CFTC said its order will recognise and offset restitution and disgorgement payments made to the Department of Justice and the Securities and Exchange Commission.

Allegations of spoofing on the bank’s precious metals desk emerged more than a year ago, in charges against several traders on the desk. But the settlement announced on Tuesday also includes new allegations about spoofing by traders on the bank’s Treasury desk.

The deal faults the bank for nearly eight years of manipulating prices of Treasury contracts, as well as trading in notes and bonds in the secondary market, that caused $106m in losses. The government said five now-former JPMorgan traders executed thousands of deceptive trades. None of those traders have been charged publicly.

The accord also ends the criminal investigation of the bank that led to a half dozen employees being charged for allegedly rigging the price of gold and silver futures from 2008 to 2016. Two have entered guilty pleas, and three traders and a former JPMorgan salesman are awaiting trial. In all, according to the settlement deal, 10 JPMorgan traders caused losses of $206 million to other parties in the market.

“For nearly a decade, a significant number of JPMorgan traders and sales personnel openly disregarded US laws that serve to protect against illegal activity in the marketplace,” said William F. Sweeney Jr. assistant director in charge of the FBI’s New York Field Office.

JPMorgan, in a statement, said it doesn’t expect any disruption of service to clients as a result of the resolutions.

“The conduct of the individuals referenced in today’s resolutions is unacceptable and they are no longer with the firm,” said Daniel Pinto, a co-president of JPMorgan. “We appreciate that the considerable resources we’ve dedicated to internal controls was recognised by the DOJ, including enhancements to compliance policies, surveillance systems and training programmes.”

The JPMorgan penalty far exceeds previous spoofing-related fines levied against banks, and is the toughest sanction imposed in the Justice Department’s multi-year crackdown on spoofing.

Spoofing typically involves flooding derivatives markets with orders that traders don’t intend to execute to trick others into moving prices in a desired direction. The practice has become a focus for prosecutors and regulators in recent years after lawmakers specifically prohibited it in 2010. While submitting and cancelling orders isn’t illegal, it is unlawful as part of a strategy intended to dupe other traders.

More than two dozen individuals and firms have been sanctioned by the Justice Department or the CFTC, including day traders operating out of their bedrooms, sophisticated high-frequency trading shops and big banks such as Bank of America and Deutsche Bank.

The Justice Department took a much more aggressive tack with JPMorgan by alleging that the bank hosted an eight-year market manipulation conspiracy with its precious metals desk as a criminal racketeering operation.

The conduct of the individuals referenced in today's resolutions is unacceptable and they are no longer with the firm

While other suspected market cheats have been charged with specific spoofing and manipulation offenses, the Justice Department accused JPMorgan metals traders under the 1970 Racketeer Influenced and Corrupt Organisations Act – a criminal law more commonly applied to Mafia cases than global bank probes.

RICO allows for prosecutors to charge multiple criminal acts involving a group of people in the same case as long as they were part of the same enterprise. The Justice Department said the conspiracy on the JPMorgan metals desk ran from March 2008 to August 2016. The two former metals traders for the bank who have pleaded guilty to fraud charges are cooperating with authorities.

The highest-level individual charged is Michael Nowak, a veteran gold trader who remained active as the global head of JPMorgan’s precious metals desk until he was indicted under seal in August 2019 along with two others. A former JPMorgan salesman who worked with hedge fund clients was later added to the case.

In 2015, JPMorgan pleaded guilty to felony antitrust charges along with several other global banks that paid penalties and admitted to conspiring to rig the price of US dollars and euros. The bank agreed to pay $550m, but it and other global lenders in the accord felt little lasting hit from markets or customers, undercutting investor fears that a guilty plea would devastate their business.

Shortly after Mr Nowak and other traders were charged under RICO, JPMorgan learned it was the focus of a separate but related criminal investigation into trading of Treasury securities and futures, according to a person familiar with the matter.

Cryopreservation: A timeline

Keyhole surgery under general anaesthetic
Ovarian tissue surgically removed
Tissue processed in a high-tech facility
Tissue re-implanted at a time of the patient’s choosing
Full hormone production regained within 4-6 months

The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

Price: From Dh117,059

Napoleon

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Cricket World Cup League Two

Teams

Oman, UAE, Namibia

Al Amerat, Muscat

Results

Oman beat UAE by five wickets

UAE beat Namibia by eight runs

Namibia beat Oman by 52 runs

UAE beat Namibia by eight wickets

Fixtures

Saturday January 11 - UAE v Oman

Sunday January 12 – Oman v Namibia

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Key products and UAE prices

iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229

iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649

iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179

Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.

FIXTURES

All times UAE ( 4 GMT)

Friday
Saint-Etienne v Montpellier (10.45pm)

Saturday
Monaco v Caen (7pm)
Amiens v Bordeaux (10pm)
Angers v Toulouse (10pm)
Metz v Dijon (10pm)
Nantes v Guingamp (10pm)
Rennes v Lille (10pm)

Sunday
Nice v Strasbourg (5pm)
Troyes v Lyon (7pm)
Marseille v Paris Saint-Germain (11pm)

What is Folia?

Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.

Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."

Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.

In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".

There are also plans to take Folia to several more locations throughout the Middle East and Europe.

While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."

About RuPay

A homegrown card payment scheme launched by the National Payments Corporation of India and backed by the Reserve Bank of India, the country’s central bank

RuPay process payments between banks and merchants for purchases made with credit or debit cards

It has grown rapidly in India and competes with global payment network firms like MasterCard and Visa.

In India, it can be used at ATMs, for online payments and variations of the card can be used to pay for bus, metro charges, road toll payments

The name blends two words rupee and payment

Some advantages of the network include lower processing fees and transaction costs

SERIES INFO

Cricket World Cup League Two
Nepal, Oman, United States tri-series
Tribhuvan University, Kathmandu

Fixtures
Wednesday February 5, Oman v Nepal
Thursday, February 6, Oman v United States
Saturday, February 8, United States v Nepal
Sunday, February 9, Oman v Nepal
Tuesday, February 11, Oman v United States
Wednesday, February 12, United States v Nepal

Table
The top three sides advance to the 2022 World Cup Qualifier.
The bottom four sides are relegated to the 2022 World Cup playoff

1 United States 8 6 2 0 0 12 0.412
2 Scotland 8 4 3 0 1 9 0.139
3 Namibia 7 4 3 0 0 8 0.008
4 Oman 6 4 2 0 0 8 -0.139
5 UAE 7 3 3 0 1 7 -0.004
6 Nepal 0 0 0 0 0 0 0
7 PNG 8 0 8 0 0 0 -0.458

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The biog

Simon Nadim has completed 7,000 dives.

The hardest dive in the UAE is the German U-boat 110m down off the Fujairah coast.

As a child, he loved the documentaries of Jacques Cousteau

He also led a team that discovered the long-lost portion of the Ines oil tanker.

If you are interested in diving, he runs the XR Hub Dive Centre in Fujairah

Volunteers offer workers a lifeline

Community volunteers have swung into action delivering food packages and toiletries to the men.

When provisions are distributed, the men line up in long queues for packets of rice, flour, sugar, salt, pulses, milk, biscuits, shaving kits, soap and telecom cards.

Volunteers from St Mary’s Catholic Church said some workers came to the church to pray for their families and ask for assistance.

Boxes packed with essential food items were distributed to workers in the Dubai Investments Park and Ras Al Khaimah camps last week. Workers at the Sonapur camp asked for Dh1,600 towards their gas bill.

“Especially in this year of tolerance we consider ourselves privileged to be able to lend a helping hand to our needy brothers in the Actco camp," Father Lennie Connully, parish priest of St Mary’s.

Workers spoke of their helplessness, seeing children’s marriages cancelled because of lack of money going home. Others told of their misery of being unable to return home when a parent died.

“More than daily food, they are worried about not sending money home for their family,” said Kusum Dutta, a volunteer who works with the Indian consulate.