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- Four ex-employees accused of spoofing precious metals markets
- Bank fraud charges tossed; wire fraud and other charges stand
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(Reuters) - A federal judge in Chicago said four former JPMorgan Chase & Co employees must face charges including racketeering in a case accusing them of manipulating the prices of precious metals futures.
U.S. District Judge Edmond Chang's ruling on Tuesday paves the way for an Oct. 19 trial in the case, which is the U.S. Department of Justice's most aggressive attempt so far to police commodities spoofing, a tactic involving placing orders to move prices and quickly cancelling them.
Prosecutors allege former global precious metals desk head Michael Nowak, traders Gregg Smith and Christopher Jordan and salesperson Jeffrey Ruffo manipulated the prices of gold, silver, platinum and palladium between 2008 and 2016.
Attorneys for Jordan and Nowak and a spokesperson for the DOJ declined to comment on Wednesday. Counsel for the other defendants did not immediately reply to requests for comment.
In his ruling, Chang rejected the defendants' argument that the allegation that they engaged in a single spoofing conspiracy was not enough to support the racketeering charge.
Chang also allowed the other eleven charges to stand, including market manipulation, spoofing, conspiracy, and commodities and wire fraud. He cited other spoofing cases in which judges allowed prosecutors to pursue those charges.
The judge did, however, throw out bank fraud charges against Smith, Nowak and Jordan, saying prosecutors had not pinpointed how or when they sought to deceive JP Morgan.
JPMorgan agreed to pay more than $920 million and admitted to wrongdoing to settle spoofing probes by the DOJ and Commodity Futures Trading Commission in September.
The case is U.S. v. Smith et al., U.S. District Court, Northern District of Illinois, No. 19-00669
For the government: Avi Perry, Matthew Sullivan and John Scanlon
For Smith: Jonathan Cogan and Sean Buckley of Kobre & Kim
For Ruffo: Guy Petrillo and Daniel Goldman of Petrillo Klein & Boxer
For Nowak: David Meister and Jocelyn Strauber of Skadden, Arps, Slate, Meagher & Flom
For Jordan: James Benjamin Jr. and Parvin Moyne of Akin Gump Strauss Hauer & Feld