The U.S. Department of Justice (DOJ) has accused five current and former JPMorgan Chase metal traders working in New York, London and Singapore. They are suspected of manipulating commodity futures prices between 2007 and 2016. Two of them have been sentenced and the review is ongoing.
JPMorgan Chase said in its August 6 filing with regulators that it was responding and cooperating with various investigations related to precious metal market trading practices. The FCA, the U.S. Department of Justice and the Commodity Futures Trading Commission declined to comment.
Others familiar with the matter include Andrew Maguire, a precious metal Trader in London, who has long complained about the manipulation of metal markets on both sides of the Atlantic.
He said he met with British MP Jeremy Lefroy in August with FCA officials to discuss possible manipulation of the metal market in London. Officials told him they were investigating JPMorgan Chases precious metal trading and had contacted the Justice Department and the Commodity Futures Trading Commission for more information.
New York and London are hubs for precious metals trading, and major international banks are the largest traders, managing orders for themselves and customers. U.S. prosecutors say five J.P. Morgan employees accused of affecting metal prices by canceling quotations before execution, and by creating the illusion that demand exceeds supply, manipulators can change prices to benefit them.
In recent years, there has been a surge in fraud-related prosecutions involving banks and traders. Among them is Bank of America Merrill Lynchs commodities division, which was fined $25 million in July and Morgan Stanley $1.5 million last month.
Source: Wang Honggui, editor in charge of Zhitong finance and Economics Network