John Edmonds, a former commodity trader at J. P.Morgan Chase & Co., pleaded guilty in October to fraudulently manipulating the precious metals market from 2009 to 2015. Edmonds’s criminal plea was related to spoofing, a certain type of improper trading that has been the subject of a broader regulatory crackdown on market manipulation since the 2008 financial crisis.
In spoofing, a trader uses a high-speed computer to send out a flurry of buy or sell orders to make it look like there is supply and demand in the market, without intending to complete the trades. Thepractice can distort prices for a commodity. Prosecutors said that Edmonds canceled bids before they could be executed. Edmonds did that so that he could purchase silver futures contracts at a below-market price. The CFTC has announced 26 enforcement actions that involved market manipulation, attempted manipulation, false reporting, spoofing or deceptive conduct. That is more than double the number in 2017 — and six times the number in 2016.