JPMorgan pays largest CFTC penalty ever of $920 million and admits wrongdoing in market manipulation case

Amr Alfiky/Reuters

  • JPMorgan will pay the largest CFTC monetary penalty ever and admitted wrongdoing in order to resolve a case surrounding claims of market manipulation in the trading of precious metals and Treasury securities, Bloomberg first reported.
  • The case covers an eight-year period and relates to the practice of “spoofing,” where traders put in large orders to buy or sell a security with no intention of executing the order, creating the appearance of demand or supply for a particular asset.
  • JPMorgan will pay $920 million, which includes a $436.4 million fine, $311.7 million in restitution, and $172 million in disgorgement.
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JPMorgan will pay $920 million and admit wrongdoing in order to resolve a case surrounding claims of market manipulation, Bloomberg first reported on Tuesday.

The $920 million payment represents the largest-ever monetary penalty imposed by the Commodity Futures Trading Commission, and consists of a $436.4 million fine, $311.7 million in restitution, and $172 million in disgorgement, according to a statement from the CFTC seen by Bloomberg.

The case covers an eight-year period and relates to the practice of “spoofing,” where traders put in large orders to buy or sell a security with no intention of executing the order, creating the appearance of demand or supply for a particular asset, and helping move that asset in the desired direction of the trader.

It’s unlawful to submit and cancel orders in a strategy intended to deceive other traders.

The settlement will put an end to a criminal investigation of the bank that has entangled a half-dozen employees. Two employees have entered guilty pleas, while four employees are facing trial, according to Bloomberg.

JPMorgan traded down as much as 2% on Tuesday.

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