JPMorgan Chase & Co. (NYSE: JPM) is reportedly close to reaching a settlement agreement, in which it could pay almost $1 billion to end investigations into its alleged manipulation of precious metals and Treasury securities markets
The U.S. Commodity Futures Trading Commission (CFTC), Department of Justice (DOJ), and the Securities and Exchange Commission (SEC) are investigating whether JPMorgan’s traders rigged the precious metals and Treasury securities markets using spoofing.
Spoofing is a scheme in which traders place a large order to buy or sell a bond, futures contract, or stock but they have no intention of executing it. These traders or spoofers disseminate false or misleading information to trick other market participants into reacting to artificial change and imbalance in supply and demand, moving prices in their desired direction.
The potential settlement will resolve the CFTC, DOJ, and SEC investigations. The federal regulators are expected to announce their agreement with JPMorgan this week, according to Bloomberg based on information from three people familiar with the matter.
A penalty that is almost $1 billion would be a record settlement for spoofing-related market manipulation charges.