JPMorgan Chase & Co.’s gold trading and sales team was so focused on making money that they scammed the market for years with so-called spoofing trades, according to a former colleague who testified at the trial of three former bank employees charged with fraud.
“Our job was to do whatever it takes to make money,” and using spoof trades to manipulate prices for all sorts of precious metals was an almost daily method for generating profit, said John Edmonds, who worked as a trader at the bank until 2017. “Everyone at the time did it on the desk and it worked.”
Edmonds is testifying against his former boss, Michael Nowak, the longtime head of the trading desk, gold trader Gregg Smith and hedge funds salesman Jeffrey Ruffo. Edmonds told a federal jury in Chicago on Tuesday that the team wasn’t just buying and selling precious metals, but systematically cheating to help themselves and their top clients over the course of the decade that Edmonds worked as a trader.
Edmonds described how he learned to spoof at JPMorgan. If he wanted to sell at a higher price, he’d put orders in above the current market price, and then place a huge orders to buy at higher prices that he’d cancel before they could be executed.
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