Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

JPMorgan’s Top Metals Trader in the Crosshairs for Illegal Gold and Silver Manipulation

Commodities / Market Manipulation Sep 17, 2019 - 03:20 PM GMT

By: MoneyMetals

Commodities

Michael Nowak, the global head of trading for both base and precious metals at JP Morgan Chase, has been charged by the US Justice department for his role in an illegal market manipulation operation. Executive Directors Gregg Smith and Christopher Jordan were also indicted.
The three are the latest targets in a widening DOJ criminal probe.

Nowak and Smith and Jordan are the third, fourth and fifth persons to be charged in the criminal price rigging scheme at  JPMorgan. They may not be the last. The bank is the most infamous amongst precious metals investors who have been crying foul over obvious price manipulation for years. 



Christian Trunz and John Edmonds, who worked for Nowak, have already pleaded guilty and agreed to cooperate with the investigation. They have outlined an operation that spanned nearly a decade and “thousands” of fraudulent trades. They have said their training in the dark arts of rigging prices and cheating clients was provided by more senior bank executives.

They were likely referring to Nowak, who is the highest placed executive set to face the music thus far.

Should Nowak also plead guilty and provide evidence against his superiors, things will get even more interesting. It would signal the matter isn’t going to be handled in the usual way, i.e. with some lower level staffer taking the fall – and regulators pretending the problem has been addressed.

Traders at Bank of America and Deutsche Bank have also pleaded guilty to spoofing. Evidence shows them working together with their peers at other bullion banks, including JPMorgan, to cheat their respective clients.

The picture emerging is not one of traders at competing banks striving to serve clients well and win business, though that is what naive clients expected. Instead, bankers placed bets against their customers. Then they used their weight in the markets and called in favors with friends at other banks to assure they won those bets.

Thus far the federal regulator tasked with enforcing fair commodities markets, the CFTC, has been quiet about its complete failure to crack down on the widespread and long-running fraud operation. The banks implicated continue to trade in the metals markets, which begs the question about whether any amount of fraud would be sufficient for their privileges to be revoked.

These and other schemes may have worked to push prices down, something long suspected by frustrated gold bugs.

The bullion banks are infamous for their massive short positions in gold and silver. Whether all those shorts are simply a natural by-product of selling contracts to any and all retail speculators, or whether they are piled up as part of a deliberate price suppression effort sanctioned by the Fed, is not certain.

Either way, the bullion banks’ incentive, generally speaking, is to profit from betting prices will fall. And the trading desk at JPMorgan has an incredible track record of profitable trades. In 2016 the bank did not have a single trading day in which they lost money. Now we know more about how the bank achieved such remarkable results.

The Justice Department and federal regulators, if the CFTC ever decides to lift a finger, might end up being the least of the bullion banks’ worries. Class-action attorneys and the victims they represent are readying civil lawsuits.

They should be able to provide proof to juries that traders at multiple banks spent years operating a large and well-coordinated racket, under the supervision and direction of very senior executives. The potential liability for bullion banks will be huge.

By Clint Siegner

MoneyMetals.com

Clint Siegner is a Director at Money Metals Exchange, perhaps the nation's fastest-growing dealer of low-premium precious metals coins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon, puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

© 2019 Clint Siegner - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in