JPMorgan Charged for Spoofing and Manipulation and Fined for $920 Million

JPMorgan Chase & Company and its two subsidiaries have been ordered by US regulatory body CFTC to repay other market participants $311,737,008 for their losses, disgorge ill-gotten gains of $172,034,790, and pay a $436,431,811 civil penalty (totally, $920.2 million) for using a banned trading tactic known as "spoofing" to manipulate markets. This is the largest amount of monetary relief ever imposed by CFTC.  

The watchdog's order shows, throughout at least 8 years from 2008 to 2016, precious metals traders and treasuries trading desks of the US registered futures commission merchant intentionally entered hundreds of thousands of deceptive orders tricking the rest of the market into buying or selling certain gold, silver, platinum, palladium, Treasury note, and Treasury bond futures contracts. This manipulative conduct pushed market prices up or down in their desired direction, thus bringing significant benefits to the companies but great harm to other market participants.

"Spoofing is illegal—pure and simple," said CFTC Chairman Heath P. Tarbert. "This record-setting enforcement action demonstrates the CFTC's commitment to being tough on those who intentionally break our rules, no matter who they are. Attempts to manipulate our markets won't be tolerated. The CFTC will take all steps necessary to investigate and prosecute illegal activities that could ultimately undermine the integrity of the American free enterprise system."

CFTC is not the only enforcement authority that tends to take severe action against a spoofing crime of such seriousness like JPMorgan's. The Department of Justice's Fraud Section, the United States Attorney's Office for the District of Connecticut and SEC also ordered the companies involved to pay a criminal fine, disgorgement, and restitution.