(Bloomberg) — JPMorgan Chase & Co. admitted wrongdoing and agreed to pay more than $920 million to resolve U.S. authorities’ claims of market manipulation involving two of the bank’s trading desks, the largest sanction ever tied to the illegal practice known as spoofing.
Over eight years, 15 traders at the biggest U.S. bank caused losses of more than $300 million to other participants in precious metals and Treasury markets, according to court filings on Tuesday. JPMorgan admitted responsibility for the traders’ actions. The Justice Department filed two counts of wire fraud against the bank’s parent company but agreed to defer prosecution related to the charges, under a three-year deal that requires the bank to report its remediation and compliance efforts to the government.
The settlement included fresh details about spoofing on the bank’s Treasuries desk, which was occurring at the same time as previously alleged market manipulation on the bank’s precious metals desk. Five traders on the Treasuries desk manipulated prices of U.S. Treasury contracts, as well as trading in notes and bonds in the secondary market, over eight years, according to the settlement, causing $106 million in losses. None of those traders have been charged publicly.
Members of that group openly discussed their illegal strategies via chats, with one trader writing on six occasions that he was “spoofing” the market, according to the government’s statement of facts. Another Treasuries trader, in a November 2012 chat, described his success in moving the market by tricking high-frequency traders: “a little razzle dazzle to juke the algos…”
The accord also ends the criminal investigation of the bank that led to a half dozen employees being charged for allegedly rigging the