Ex-JPMorgan metals chief 'missed the memo from Al Capone,' attorney says

A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in Manhattan, New York, U.S. REUTERS/Amr Alfiky

(Reuters) - An attorney for a former JPMorgan Chase & Co executive urged a jury to acquit his client on Friday, saying prosecutors had not proven that he orchestrated a racketeering scheme to manipulate precious metals futures.

Michael Nowak, the bank's former global precious metals desk head, did not seek to downplay potential spoofing on the desk, but flagged it to his superiors, his attorney David Meister said during closing arguments in Chicago.

"If Mike was a racketeer, he must have missed the memo from Al Capone," Meister said.

Nowak, former JPMorgan precious metals trader Gregg Smith and salesperson Jeffrey Ruffo are on trial together on charges of conspiracy and racketeering for an alleged scheme to manipulate precious metals futures between 2008 and 2016.

In addition to racketeering and conspiracy, Nowak faces 13 other charges, including fraud, spoofing and attempted market manipulation, and Smith faces 11 additional charges. All three men have pleaded not guilty.

Prosecutors say the goal of the scheme was spoofing, a manipulative tactic to place and then quickly cancel buy or sell orders to create the illusion of demand or supply and then profit from the price movement.

Meister told jurors on Friday that there had been no evidence in the trial that Nowak ever talked about spoofing with former JPMorgan metals traders Christian Trunz and John Edmonds.

Both Trunz and Edmonds pleaded guilty to related charges and cooperated against their former colleagues, acting as key witnesses at trial.

"If this was a conspiracy, it was the most quiet conspiracy in the history of humankind," Meister said.

Ruffo, who is charged with conspiracy and racketeering, was never a trader. His attorney Bethany Biesenthal argued Friday that the case was based on "major exaggerations."

On Thursday, prosecutors said trading data and the testimony from Trunz, Edmonds and others proved the defendants' guilt. Matthew Menchel, who represents Smith, argued the data was cherry-picked and the cooperators cannot be trusted.

The case is U.S. v. Smith et al., U.S. District Court, Northern District of Illinois, No. 19-cr-00669.

For the government: Avi Perry, Matthew Sullivan, Lucy Jennings and Christopher Fenton of the U.S. Department of Justice's Fraud Section

For Smith: Sean Buckley, Jonathan Cogan, Matthew Menchel, Leanne Bortner and Chris Cogburn of Kobre & Kim

For Nowak: David Meister, Chad Silverman and William Ridgway of Skadden, Arps, Slate, Meagher & Flom

For Ruffo: Guy Petrillo, Daniel Goldman and Leonid Sandlar of Petrillo Klein & Boxer and Bethany Biesenthal of Jones Day

Read More:Ex-JPMorgan traders' racketeering trial draws to close

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Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com