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Former JPMorgan gold traders get prison for 'prolific spoofing'
By Steve Stroth and Joe Deaux
Bloomberg News
Tuesday, August 22, 2023
The former head of JPMorgan Chase & Co.'s precious-metals desk and his top trader today were sentenced to prison for spoofing, fraud, and attempted market manipulation.
Michael Nowak, who ran gold and silver trading at the bank, and trader Gregg Smith were sentenced in Chicago by U.S. District Judge Edmond Chang. Nowak received a term of one year and one day while Smith was given two years, the stiffest sentence yet in a recent government crackdown on questionable trading practices.
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Both men were convicted at a trial last year. Smith, 59, was described as "the most prolific spoofer that the government has prosecuted to date" while Nowak, 49, has been called "the boss" behind the scheme.
In imposing sentence, the judge said Smith and Nowak clearly knew what they were doing was wrong.
"This is a serious offense that you committed," Chang said to Nowak. "What happened here was the equivalent of putting out lies -- and many lies -- into the market. Market integrity is a crucial component to the financial markets. These lies moved the market. It's not like they had zero impact."
The prison sentences were intended to "send a message" that market manipulation will be punished, the judge said. "I'm trying to deter all forms of financial fraud in the market," he said.
Chang ordered Nowak to start his sentence on Oct. 23 and Smith on Jan. 15. Lawyers for both men said they planned to appeal their convictions. ...
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