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JPMorgan gold trader spoofed so fast he was urged to put ice on his fingers
PMorgan Trader Spoofed So Fast Colleagues Urged Ice on Fingers
By Eddie Spence
Bloomberg News
Tuesday, July 19, 2022
Gregg Smith clicked his computer mouse so rapidly to place and cancel bogus gold and silver orders for Bear Stearns Cos. and later JPMorgan Chase & Co. that his colleagues would joke that he needed to put ice on his fingers to cool them down afterward, or that he must be double-jointed.
That's how his former protege, Christian Trunz, described for jurors how he watched Smith use so-called "spoof" trades -- large orders intended to manipulate prices that were quickly canceled. Trunz, 37, said he learned how to spoof from Smith and others after joining Bear Stearns out of college in 2007, shortly before the bank was acquired by JPMorgan.
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To place and cancel the orders fast required a "rapid succession of clicking on a mouse," and Smith, the desk's top trader, was particularly good at it, Trunz told a federal jury in Chicago on Tuesday. That clicking was easy for everyone on the desk to hear, according to Trunz, who sat next to Smith for years and said he often pulled his chair alongside his mentor's computer screen to watch him trade.
Trunz is the third former trader to testify at the fraud and racketeering trial of Smith and two senior employees at JPMorgan’s precious-metals desk: Managing Director Michael Nowak and hedge-fund salesman Jeffrey Ruffo. They're accused of systematically cheating to help themselves and their top clients for years. ...
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JPMorgan Gold Trader Says Boss Coached Him to Lie About Spoofing
By Eddie Spence
Bloomberg News
Wednesday, July 20, 2022
A former JPMorgan Chase & Co. precious-metals trader said his boss coached him to lie to compliance officials about price-manipulating orders and later counseled him against pleading guilty as prosecutors were preparing criminal charges against top executives on the trading desk.
Christian Trunz, who spent more than a decade at JPMorgan, told a Chicago jury that so-called spoof orders he had placed and quickly canceled for palladium had sparked a four-month probe by bank officials. Trunz said Michael Nowak, the managing director who ran the precious-metals business, advised him to mislead investigators about his intent to execute the trades.
"Mike made it clear to me that this was something that could get me fired," Trunz, 37, said today, even though the bogus orders were a trading strategy used by everyone on the desk and a method he had learned after joining the precious-metals team out of college. "I wanted to keep my job," he said, so he decided to lie to bank investigators.
Before Trunz was to meet with compliance officials, he said Nowak urged him to say "every order you put into the market you intended to trade." But that wasn't true, Trunz said, because he and others at JPMorgan routinely placed large orders in gold and silver that they never intended to execute to push prices up or down. "These trades were the exact trading pattern we had used for years."
Trunz, who pleaded guilty in 2019 to spoofing conspiracy and is cooperating with prosecutors, is the third former trader to testify at the fraud and racketeering trial of Nowak; Gregg Smith, JPMorgan's top gold trader; and hedge-fund salesman Jeffrey Ruffo. They are accused of systematically manipulating precious-metals markets with spoof orders to help themselves and big hedge-fund clients for years. ...
... For the remainder of the report:
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