JP Morgan’s Deferred Prosecution Agreements (Case Study 15) скачать в хорошем качестве

JP Morgan’s Deferred Prosecution Agreements (Case Study 15)

JP Morgan’s Deferred Prosecution Agreements For more info, contact Michael@ComplianceMitigation or visit ComplianceMitigation.com From a period of at least 2009 through 2015, the precious metals department at JP Morgan engaged in spoofing, manipulating the prices of gold, silver, platinum and palladium futures contracts on exchanges run by the CME Group, a diverse derivatives market specializing in trading commodities. They routinely placed orders and quickly cancelled them before the trades were executed, distorting the prices of those commodities. John Edmonds, a relatively junior trader in the department with the title of vice president, spent 13 years at the firm. While there, several senior traders took him under their wings to show him the ropes. Edmonds gained tremendous experience from this tutelage including the regular use of the practice of spoofing to gin up profits. The practice had been endemic in the trading pits since the onset of electronic trading. His supervisors during his tenure with the bank included Michael Nowak, a managing director at J.P. Morgan who also heads the firm’s global precious metals desk, along with Gregg Smith and Christopher Jordan, who both held the title executive director and were traders on the firm’s precious metals desk while employed at J.P. Morgan. News of potential problems for JP Morgan and these traders initially surfaced in November of 2018 when Edmonds pled guilty to manipulating the U.S. markets of an array of precious metals for about seven years. Edmunds entered into the guilty plea under a charging document known as a Bill of Information, which the government sometimes substitutes in for an indictment when acting clandestinely behind the scenes. The government did not issue a barrage of subpoenas or conduct any raids telegraphing events about to come. The investigation instead stemmed from the government’s use of big data analysis; an increasingly important tool used by federal agents to uncover white collar crime. They then presented Edmonds with the evidence and gave him a choice, plead guilty and cooperate or we will aggressively pursue this case at trial where you will be facing a potential 30-year sentence. JP Morgan only learned about the investigation shortly before Edmonds’ guilty plea, according to officials at the bank. The government originally penciled in Edmonds’ sentencing for December but delayed the procedure while Edmonds continued to cooperate. During this time, the government brought similar charges against traders at several other banks including Deutsche Bank and Bear Stearns. All told, prosecutors brought a total of 13 spoofing cases against 19 defendants. The next shoe in the JP Morgan case did not drop until September 2019 when the government brought charges against Nowak, Smith and Jordan claiming the traders participated in a racketeering conspiracy in connection with a multiyear scheme to manipulate the markets and defraud customers. “The alleged scheme saw the nation’s largest bank by assets profit handsomely, while investors suffered losses. We believe we will be able to prove that there are millions of dollars in profits [for the] bank and tens of millions of dollars of losses,” according to government prosecutors. Regulators at the CFTC simultaneously brought civil charges against Nowak and Smith, adding to their legal troubles and juicing up attorney’s fees. The government brought the charges under the Racketeer Influenced and Corrupt Organizations Act, or RICO, as well as other federal crimes. Legislators originally created RICO with the intent of going after mafia-led organized crime. Rudy Giuliani later famously began using it against white collar crime in the 1980s, since its powerful penalties enabled the government to wield a bigger hammer in bludgeoning defendants into guilty pleas. Since financial amounts influence the federal sentencing guidelines, defendants in fraud cases like spoofing face sentences measured in decades. JPMorgan next faced the music, as the government investigation uncovered tens of thousands of episodes of unlawful trading in the markets for precious metals futures contracts, and thousands of episodes of unlawful trading in the markets for the U.S. Treasury futures contracts, meant to enhance profits and avoid losses. JPMorgan entered into a deferred prosecution agreement (DPA) agreeing to pay more than $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation. The government claimed the penalties and fines recovered on the case reflected the nature and seriousness of the bank’s offenses. The fine represented a milestone in the department’s ongoing efforts to ensure the integrity of public markets critical to our financial system