A federal jury on Wednesday convicted the one-time head of JPMorgan Chase & Co.’s precious-metals desk and its top gold trader of fraud after they were accused of manipulating futures with a price-rigging tactic known as “spoofing.” The traders, Michael Nowak and Gregg Smith, were found guilty of spoofing, wire fraud, commodities fraud, and attempted price manipulation. They were acquitted, however, of conspiracy and racketeering under the RICO Act, a charge that would have essentially cast the firm’s precious-metals division as a crime syndicate, according to The Wall Street Journal. A third defendant, Jeffrey Ruffo, who worked in sales, was acquitted on both charges of conspiracy and racketeering that he faced. During the three-week trial, the Chicago jury heard how Smith, the top gold trader, would click his computer mouse placing and canceling fake spoofing orders—which “lured others into making disadvantageous trades,” as the Justice Department put it—so quickly that colleagues would ask jokingly if he needed to ice his fingers.
Read it at The Wall Street Journal
