Amr Alfiki / Reuters
- JPMorgan is set to pay about 1 1 billion to regulate waste from regulators in the U.S. precious metals and treasury markets, Bloomberg reported Wednesday.
- The payment will be investigated by the Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission.
- Bloomberg said about 1 1 billion would be a settlement related to spoofing and closer to previous penalties for other forms of market manipulation.
- Spoofing involves placing many orders in the market, without the intention of filling them, often misleading other traders to push prices in a certain direction.
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JPMorgan is set to pay about 1 1 billion to settle with US officials to investigate whether the bank has manipulated the metals and treasury markets, Bloomberg reported on Wednesday.
The amount will set a record for spoofing-related settlements and could be announced as early as this week, sources familiar with the matter told Bloomberg. The payment will be consistent with other market-manipulation restrictions but will exceed the previous spoofing penalty.
The report said the payment would resolve investigations by the Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission. Agencies are investigating whether traders at JPMorgan’s metal-futures and treasury desks are interfering in related markets.
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Spoofing is a form of market manipulation that usually involves traders who place many orders with no intention of executing; Which can mislead market participants to raise prices in a certain direction. Although the act under which many businesses operate is not illegal, regulators outlawed the strategic use of such trade in 2010 by the Dodd-Frank Act.
A source told Bloomberg that the settlement is unlikely to restrict JPMorgan’s business practices and that the bank accepts wrongdoing.
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In criminal charges against JPMorgan last year, the Justice Department alleged that employees at the bank’s precious metals desk turned the venture into an enterprise that frequently engages in illegal market activity.
After allegations were made against former head of the precious metals desk, Michael Navak, JPMorgan learned of a separate investigation of its Treasury desk, Bloomberg reported.
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