JP Morgan having been fined more than a dozen times over the past decade for fraudulently rigging the Forex, Libor, and Mortgage interest rate markets, it should not come as a surprise that the DOJ have turned their attention to JPM’s activities in the gold markets.
On Sept. 17, the Department of Justice (DOJ) not only decided to finally look into the investment bank’s dealings in the gold markets they went far as to call them a criminal enterprise.
In an indictment unsealed on Monday morning, the DoJ charged Michael Nowak, a JPMorgan veteran and former head of its precious metals trading desk and Gregg Smith, another trader on JPM’s metals desk, in the probe. (Blythe Masters was somehow omitted).
“Based on the fact that it was conduct that was widespread on the desk, it was engaged in in thousands of episodes over an eight-year period — that it is precisely the kind of conduct that the RICO statute is meant to punish,” Assistant Attorney General Brian Benczkowski told reporters.
Here’s where it gets extra interesting: according to Bloomberg, the unusually aggressive language language embraced by prosecutors reminds legal experts of indictments utilizing the RICO Act – a law allowing prosecutors to take down ‘criminal enterprises’ like the mafia by charging all members of the organization for any crimes committed by an individual on behalf of the organization. – Zerohedge
Importantly one of the three primary bankers involved in the manipulation and price rigging, one of them is actually on the Board of the London Bullion Market Association (LBMA) who is responsible for the ‘fixing’ of prices twice a day for gold.
In the indictment unsealed 16 September 2019, the DoJ charged LBMA Board member and JP Morgan managing director Nowak, along with JP Morgan precious metals trader Gregg Smith and former JP Morgan precious metals trader Christopher Jordan for:
“alleged participation in a racketeering conspiracy and other federal crimes in connection with the manipulation of the markets for precious metals futures contracts, which spanned over eight years and involved thousands of unlawful trading sequences.”
Commenting on the case, Department of Justice Assistant Attorney General Brian A. Benczkowski stated that: “The defendants and others allegedly engaged in a massive, multiyear scheme to manipulate the market for precious metals futures contracts and defraud market participants.” – Bullion Star
Senator Elizabeth Warren was able to get the CEO of Wells Fargo to resign following the bank’s egregious manipulation of the mortgage, credit card, and depositor markets. So with JP Morgan having now manipulated markets that encompass a combined several trillion dollars worth of activity, is the Senate and DOJ finally going to force Jamie Dimon to face the music, or is he going to suddenly get a case of the Sicilian Flu once again and claim that he had no knowledge of any of this just as before.
Or will they blame Bear Stearns which they acquired more than a decade ago.