Posted 6 months ago | by Ben Armstrong
Conspiracy Fact – JP Morgan Pays $920 mln in Fines for Gold and Silver Price Manipulation
For years there have been allegations against mega banks like JP Morgan – the idea was simple – major banks were using the US futures markets to drive down the price of silver and gold – clearly trying to prop up the value of the US dollar.
In a recent release published by the Department of Justice, JPMorgan had agreed to pay up to $920 million in restitution for accumulated charges of unlawful trading of precious metals future contracts and unlawful trading for US treasury futures contracts in addition to notes and bonds.
The agreement to pay up to a billion dollars in fines will end the investigation by the Justice Department on spoofing charges and market manipulation – but there are likely more problems coming for the big banks.
JP Morgan Committed Massive Fraud
It is easy to see that these money center banks – likely in collusion with the FED – have been shaking down the metals markets for years.
The situation was summed up by Brian C. Rabbit, Assistant Attorney General in the Criminal Department of the Justice Department,
“For over eight years, traders on JP Morgan’s precious metals and U.S. Treasuries desks engaged in separate schemes to defraud other market participants that involved thousands of instances of unlawful trading meant to enhance profits and avoid losses,”
Spoofing means inflating the price of commodities by submitting a plethora of false orders that will never be filled. Moving the value of said commodities to match with a preferred position. This practice has been banned since 2010 – although JP Morgan apparently thought it was above the law.
What Happened in the Manipulated Markets?
The highlight of this investigation found a large number of traders and sales personnel on JPMorgan’s precious metal desks in London, New York, and Singapore were involved in defrauding the market through market manipulation of various transactions.
Guess what commodities were being manipulated?
Gold, silver, palladium, and platinum futures contracts were used in “tens of thousands of instances” over a two year period to defraud other market participants – and move the price of metals in any way the cabal at JP Morgan chose.
In addition, the period between April 2008 and January 2016, JPMorgan's traders on the US treasury desk in New York and London were also involved in various fraudulent trades.
“In thousands of instances, traders on the U.S. Treasuries desk placed orders to buy and sell U.S. Treasury Products with the intent to cancel those orders before execution, including in an attempt to profit by deceiving other market participants through injecting false and misleading information concerning the existence of genuine supply and demand for U.S. Treasury Products.”
What Fraud Means for JPMorgan
For the time being, the deal struck between JPMorgan and the Justice Department will not result in any business restrictions, but we may anticipate more upcoming fines as in the past, there have been charges of market manipulation against the bank.
Furthermore, JPMorgan was given credit for their cooperation in regards to the investigation and will be terminating individuals that participated in the wrongdoing – although like most crimes that happen in the banking sector – no one is going to jail.
The idea that JPMorgan could receive better treatment because it was willing to share information about a multi-year fraud – that it perpetrated – is absurd. We now know – with zero doubt – that major banks have kept a lid on precious metals – but those days appear to be ending.
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