Editor’s Note: With so much market volatility, stay tuned for the daily news! Immerse yourself in minutes with our quick summary of today’s news and must-read expert opinions. Register here!
(Kitco News) — After a three-week trial, the jury is continuing its deliberations on the most significant court case affecting the precious metals market in history.
Michael Nowak, head of the precious metals desk at JPMorgan Chase, gold trader Greg Smith and Jeffrey Ruffo, executive director specializing in hedge fund sales, were accused of manipulating and manipulating the prices of gold and silver for eight years between 2008 and 2016.
Nowak and Smith face charges of racketeering conspiracy and conspiracy to commit price gouging, electronic fraud, commodity fraud and fraud; Ruffo was charged with extortion and conspiracy. The men face three years in prison if found guilty.
“For years, executives at one of the world’s largest banks have conspired to manipulate the precious metals markets,” Matthew Sullivan, an attorney at the US Department of Justice, said during his closing arguments Thursday. “The three worked together to achieve the same goal: to make profits for the Precious Metals Bureau by plagiarism.”
However, in their closing statement Friday, the defense team argued that Nowak’s plagiarism orders were legitimate and were carried out about 25% of the time, “making him the world’s worst scammer.”
David Meister, Novak’s defense attorney, said in his closing arguments that state prosecutors relied on poor evidence and questionable witnesses to support their theory that Nowak was a master fraud.
“Mike is not the criminal mastermind of the government’s narrative,” Meister said.
Plagiarism is a type of deceptive trading where bids and offers are placed in the market and canceled before they are filled. There is no intention of filling these applications. Trades are made to provide a false sense of volume in one side of the market or the other.
While the jury is now debating, the three-week trial provided extraordinary insight into the world’s largest gold bullion bank.
JPMorgan does not detail its returns in its dividend filings; However, documents submitted to the court during the trial showed how profitable the precious metals and commodity markets are for the investment bank.
According to Bloomberg, who has been covering the experience, JPMorgan saw annual profits related to trading the precious metals markets between $109 million and $234 million annually between 2008 and 2018. The bank also averaged $30 million annually in trading and moving physical bullion.
The precious metals market remains a profitable place for the bank. In 2020, JPMorgan saw record revenues of $1 billion from trading gold and silver. The precious metals market has seen unprecedented demand as the global economy has stalled during the COVID-19 pandemic.
Experience has also shown that JP Morgan stands out in the precious metals market as it is a major player among a few bullion banks. It stores billions of dollars’ worth of gold and silver in major markets such as London, New York and Singapore. the bank
According to experience, in 2010, 40% of all gold transactions were liquidated by JPMorgan.
Experience also showed how much the three traders made in terms of trading gold and silver. According to data submitted to the court, Nowak, who headed the trading desk, made $23.7 million between 2008 and 2016. Smith earned $9.9 million over the eight-year period. Ruffo earned $10.5 million.
According to Bloomberg, some jurors “gasp” when they hear how much the three have achieved.
Disclaimer: The opinions expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, Kitco Metals Inc. cannot. Nor does the author guarantee this accuracy. This article is for informational purposes only. It is not a solicitation to conduct any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. does not accept The author of this article will be liable for losses and/or damages arising from the use of this publication.