The US authorities said on Tuesday that JPMorgan Chase & Co is a JPM company that agrees to compensate more than $ 920 million for its offense related to manipulation of the US Federal market when trading Treasury securities, as well as metal futures.
According to the CFTC - Commodity Futures Trading Commission, JP Morgan used a manipulation scheme from 2008 to 2016 in placing orders by traders on one side of the market that they never intended to execute, thus creating a false impression of interest in buying or selling, which could raise or lower prices in accordance with the consent of their execution.
This manipulative practice designed to create the illusion of demand or lack of it is also known as "spoofing".
According to the CFTC, some of the transactions were made on JP Morgan's own account. Sometimes traders manipulated the market to facilitate trades for hedge Fund clients. And according to the Agency, when the new surveillance system revealed problems, the Bank continued to perform its manipulations even in 2014.
According to Daniel Pinto, CEO of JPMorgan Corporate and Investment Bank "the behavior of the individuals mentioned in today's resolution is unacceptable and they are no longer employed by the company."
He even added that the Bank has invested "significant resources" in strengthening its internal compliance policies, surveillance systems and training programs.
The Bank entered into an agreement with the Department of Justice and the United States Attorney's Office for the district of Connecticut to defer legal action, which prevented criminal prosecution on charges of electronic fraud.
In recent years, the CFTC and the Justice Department have targeted spoofing by using sophisticated data analysis tools that previously could not be detected.
Reuters reports that around 2017, the Agency began using methods it initially developed to detect healthcare fraud schemes in identifying suspicious trading patterns, including by scanning activity on exchanges.
The Commodity Futures Trading Commission said in a statement that this was the largest monetary penalty they had ever imposed. It includes a fine of $ 436.4 million, a refund of $ 311.7 million in damages, and the seizure of more than $ 172 million.
