NEW YORK/LONDON (Reuters) – Britain’s monetary providers regulator is inspecting allegations of treasured metals market manipulation by JPMorgan Chase & Co merchants following legal fees by U.S. authorities, based on two folks conversant in the matter.
FILE PHOTO: A view of the outside of the JP Morgan Chase & Co. company headquarters in New York Metropolis Could 20, 2015. REUTERS/Mike Segar/Information
The UK Monetary Conduct Authority (FCA) is among the numerous authorities that JPMorgan has beforehand stated had been investigating its metals buying and selling, based on one of many folks, who declined to be named as a result of sensitivity of the matter. The watchdog has requested paperwork and different data from JPMorgan, the supply stated.
The precise scope of the FCA scrutiny or whether or not it’s going to end in any fees was unclear.
The U.S. Division of Justice (DOJ) has charged 5 present and former JPMorgan metals merchants, who labored in New York, London and Singapore, with alleged worth manipulation between 2007 and 2016. Two of them have been charged in parallel by the Commodity Futures Buying and selling Fee (CFTC). The joint investigation is ongoing, a DOJ official has stated.
One of many merchants was charged in 2018, and 4 this yr. Two have pleaded responsible to manipulating costs. The attorneys for the three most just lately charged, in September, stated their purchasers would contest the allegations in opposition to them.
JPMorgan stated in an Aug. 6 regulatory submitting that it was “responding to and cooperating” with numerous investigations referring to buying and selling practices within the metals markets.
The FCA, DOJ and CFTC all declined to remark.
The second particular person conversant in the matter is London-based metals dealer Andrew Maguire, who has lengthy complained about alleged metals market manipulation on either side of the Atlantic.
He instructed Reuters he met FCA officers in August, together with British lawmaker Jeremy Lefroy, to debate attainable metals market manipulation in London. He stated he was instructed by the officers that they had been trying into JPMorgan’s metallic buying and selling, and that that they had contacted the DOJ and CFTC to be taught extra.
Lefroy confirmed that the assembly with the FCA passed off and stated he and Maguire had been assured that the FCA was following the U.S. investigation carefully for any attainable implications in Britain and would comply with up on these if discovered.
New York and London are hubs for treasured metals dealing, and huge worldwide banks are among the many greatest merchants, managing orders for themselves and purchasers.
U.S. prosecutors have stated that the 5 charged JPMorgan merchants had influenced metals costs by inserting bids with the intent to cancel them earlier than execution – a way generally known as spoofing. By creating an phantasm of demand, spoofers can transfer costs to learn their market positions.
There was a surge in spoofing-related prosecutions in recent times involving banks and sellers. These embrace Financial institution of America Corp’s Merrill Lynch commodities unit, which was fined $25 million by U.S. authorities in July, and Morgan Stanley, which was fined $1.5 million in america final month.
The DOJ has taken an aggressive stance, most just lately charging three of the 5 males within the JPMorgan case with a racketeering conspiracy, a way extra generally related to organized crime prosecutions. All contest the fees.
The U.S. fees in opposition to JPMorgan employees heart on manipulation of U.S. exchanges. Buying and selling might be performed on these exchanges from areas exterior america, together with London, the place a number of the males charged by U.S. investigators have been based mostly.
The London Bullion Market Affiliation (LBMA), which units commerce requirements for metals buying and selling however shouldn’t be a regulator, stated it “takes very significantly all allegations of misconduct or legal conduct which can prejudice or harm the integrity and environment friendly operation of the dear metals markets”.
JPMorgan, like most different massive worldwide banks that commerce gold, is an LBMA member.
Reporting by Lawrence Delevingne in New York and Peter Hobson in London; Modifying by Pravin Char