JPMorgan Chase will pay a record $920 million to resolve a criminal investigation by three federal agencies over its role in the alleged manipulation of precious metal and Treasury markets, federal regulators said on Tuesday.
JPMorgan agreed to a settlement that resolves investigations by the Justice Department, Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
As part of the deal, the bank will admit to wrongdoing and pay a record fine of $920 million, according to a statement from the CFTC on Tuesday.
The fine is the largest ever imposed on a bank for spoofing, a type of market manipulation where traders flood markets with orders they don’t actually execute with the intention of creating an illusion of demand.
The practice was banned in 2008 after the financial crisis, and in recent years federal regulators have ramped up efforts to crack down on market manipulation.
The charges against JPMorgan were for “manipulative and deceptive conduct and spoofing that spanned at least eight years and involved hundreds of thousands of spoof orders in precious metals and U.S. Treasury futures contracts,” according to the CFTC.
The order finds that JPMorgan’s illegal trading “significantly benefited” the bank while it “harmed other market participants.”
In an accompanying statement, CFTC commissioner Dan Berkovitz said that he opposed his agency’s ruling that JPMorgan’s actions “should not result in any disqualifications under the ‘bad actor’ provisions of the securities laws.”
“For eight years, a group of traders at JPMorgan systematically ‘spoofed’ precious metals and Treasury futures markets by entering hundreds of thousands of orders with the intent to cancel them before execution,” Berkovitz said. “The commission’s order