No doubt about it, there’s uncertainty in the market — some traders will ping pong back and forth, wondering whether they should buy strong stocks or short the market.
Me, on the other hand, I’ll probably just let the “smart money” show me where the trades are.
If you don’t know why I love to follow the money trail, allow me to show you with an exciting story about one of the oldest financial institutions in the U.S. and how it got caught red-handed and had to pay a fine of…
Nearly $1B to resolve.
If this doesn’t make sense to you at first…
Don’t worry, everything will be crystal clear.
JP Morgan Traders Charged With A Slew Of Crimes
It is one of the oldest financial institutions in the U.S. It has clients worldwide with trillions of client assets under management.
But well-known JP Morgan Chase & Co. will be known for something else now too….
Something it is paying almost a BILLION dollars to resolve.
Turns out there was a lot more in the company’s closet than being the friendly neighborhood Chase bank.
It’s a scheme that made me cringe learning about than I currently do hearing someone cough when I’m dining out.
For over 8 years, traders at JP Morgan and the U.S. treasuries desk were starting down their own devious path.
A path that would be marked by the thousands of times they engaged in unlawful trading meant to butter up their biscuit and skirt losses.
What These Traders Got Caught Doing
In March 2008 stretching to August 2016, certain JP Morgan traders and sales personnel who work the company’s precious metals desk joined forces.
Together they conspired around the globe, from the Big Apple to London to Singapore.
Their scheme was not world domination but to commit fraud by way of buying precious metals futures contracts that trade in the NYSE and the COMEX.
These scoundrels would place orders to buy and sell precious metals futures contracts.
Sounds perfectly normal right? WRONG.
The plan was always to cancel those orders before they were executed.
Moves that would trick others into bandwagoning onto their orders based on this false and flat out misleading data they injected into the market. Making the supply and demand for these future contracts all an illusion.
This was not just for kicks and giggles. They were working nasty angles to get the prime prices their hearts desired.
Repeatedly, placing bids that other traders would jump on—pushing the price right to where the salivating JP Morgan traders were eagerly waiting for it.
How many times they would commit fraud was sickening (seriously I threw up in my mouth). They performed this illegal act tens of thousands of times.
But these scumbags will now have to fight to scheme another day.
Millennials John Edwards and Christian Trunz have pleaded guilty for their part in the scam last year.
Now they are talking…. A nightmare comes true for the others involved.
3 more now-former JP Morgan traders have fallen under the watchful eye of the feds. Gregg Smith, Christopher Jordon, Michael Nowak, along with 1 salesman have been formally charged.
Receiving notches in their belts for racketeering conspiracy and a slew of other FEDERAL crimes related to their spoofing of the precious metals market.
But now the feds seem to be gunning for the top rank trader entangled in this crime ring.
── Michael Nowak the Managing Director and trader on the precious metals desk. It was a position that placed him in a prime spot by supervising other traders in the biz and working out of NYC and London.
A Slap On The Wrist?
JP Morgan has now agreed to pay $920 million to resolve the U.S.’s deep dive into its trading practices. A sickeningly large sum to settle the probe into the company for its part in the manipulation of the metals and treasury global markets.
Looking at the breakdown for this is enough to stop anyone from ever thinking about turning to the dark side…. I might never jaywalk again out of pure fear.
$436.4 million of this almost billion settlement will be going towards paying a criminal penalty. $172 million will be poured into a criminal disgorgement.
Then let’s hear it for the victims, who will receive $311.7 million in compensation according to the DOJ.
More traders and firms have received sanctions from the DOJ, with the scheme branch out beyond the walls of JP Morgan.
Days before the JP Morgan bomb dropped, 2 Deutsche Bank traders were convicted. 2 young sons of gun were prosecuted for their part in the precious metals futures contracts fraud and manipulation in connection to JP Morgan.
I’m not telling you this story to cry conspiracy. I want to show you how some of the largest players on Wall Street move.
Click here to find out where the “smart money” places some of their largest bets… and how you can legally steal their ideas and make them your own.