Traders At JPMorgan Chase Indicted For Rigging Metal Prices
October 2019 by Scott Harn
The Department of Justice announced three traders at JPMorgan Chase have been indicted for manipulating precious metals prices.
Those indicted include Michael Nowak, age 45, Gregg Smith, age 55, and 47-year-old Christopher Jordan, all of New Jersey.
The indictment alleges the three men conspired to manipulate commodity prices over an eight-year span. They are being charged under the Racketeer Influenced and Corrupt Organizations (RICO) Act, which was originally designed for taking down the mafia.
Gregg Smith is an active trader for JPMorgan Chase; Christopher Jordan left the company in 2009.
Michael Nowak was in charge of the global precious metals desk for the company and a member of the board of the London Bullion Market Association (LBMA) and serves on the committee for the London Metal Exchange (LME).
Benchmark futures prices are set twice each business day following a conference call between members of the London Gold Market Fixing group. JPMorgan Chase is one of the 12 members of that group.
The complaint states the three men “engaged in widespread spoofing, market manipulation and fraud while working on the precious metals desk...through the placement of orders they intended to cancel before execution (Deceptive Orders) in an effort to create liquidity and drive prices toward orders they wanted to execute on the opposite side of the market. In thousands of sequences, the defendants and their co-conspirators allegedly placed Deceptive Orders for gold, silver, platinum and palladium futures contracts traded on the New York Mercantile Exchange (NYMEX) and Commodity Exchange (COMEX), which are commodities exchanges operated by CME Group Inc.”
Assistant Attorney General Brian Benczkowski stated the men sought to “inject false and misleading information about the genuine supply and demand for precious metals futures contracts into the markets, and to deceive other participants in those markets into believing something untrue, namely that the visible order book accurately reflected market-based forces of supply and demand.”
“Today’s announcement involves the alleged manipulation of gold, silver, platinum, and palladium futures prices, by executives and traders, at one of this country’s premier financial institutions,” said Benczkowski. “These precious metals are widely used for investment and industrial purposes, and they are key benchmarks for the US economy.”
The complaint indicates there were “co-conspirators,” so we may see additional names announced at a future date. Benczkowski stated the Justice Department has several cooperating witnesses, including other JPMorgan Chase employees.
Our readers may remember a series of articles we published on the Gold Anti-Trust Action Committee (GATA), a group that formed back in January 1999 to expose manipulation of precious metals market prices by various banks.
Over the years, GATA amassed more than enough information to document the unlawful suppression of prices, but their persistent calls for investigation were continually ignored by the Department of Justice. It appears they finally reached someone in the current administration who was willing to take action.
Many commodity experts have argued that, based on supply and demand, gold and silver prices should be much higher than they are presently. We’ll have to wait and see what impact this RICO case has on current and future prices. In the meantime, we applaud GATA for their unwavering commitment to exposing this fraud.
Exposed veins and outcroppings can be a great source for gathering good gold ore for processing. Veins and outcroppings do require a lot of work to free the ore from its earthen grip, but this labor can be very rewarding.
One of the greatest opportunities afforded to the citizens of our country is the right to stake and hold mining claims on federal lands. One doesn’t need to be a lawyer to stake mining claims, but a little bit of knowledge about mining claim laws can be helpful.
In some ways, silver is the forgotten precious metal because it straddles both the world of precious metals and jewelry, while having many important industrial applications like a base metal. The price of silver reflects both the precious metal investment demand as well as the industrial demand.
These are entry-level machines designed with gold prospecting in mind and with the ability to handle mineralized ground and see nuggets of a grain or so in size, perhaps smaller.
Bela and Barbara Kovacs began prospecting for gold about seven years ago as a family orientated outdoors activity. A welder by trade and lured by the simple fact that beach sands can contain small bits of precious metals, Bela decided a few years ago to build a sand sucking contraption that can sift the shoreline for anything worth keeping.
We are both very experienced working this type of ground, and we quickly found the pay layer where we would focus our efforts. The bedrock has good gold, but so does the red hard pan.
I figure there are a lot of new people out there who have the same question. I will try to give some answers that hopefully will give you more confidence in finding your own spots.
The Bawl Mill • Ask The Experts - Do you have more info on Silver Peak? • Ask The Experts - Forest Service blocking claim access • Green Valley's Fine Gold Patch • Hard Rock and Placer Gold of Manhattan, Nevada • Gold Prospecting for Better or Worse: Powerless • Revisiting Old Haunts • How to Refine Silver—Pt II • Where to Start: Advice for the Beginning Detectorist • Melman on Gold & Silver • Mining Stock Quotes and Mineral & Metal Prices