JP Morgan Faces Potential Class Action Lawsuit After Guilty Pleas By a Former Metals Trader
The comments below are an edited and abridged synopsis of an article by Denton Staff Contributor
Traders from across the US are banding together to accuse J. P. Morgan Chase (JPM) of manipulating the precious metals markets. At least six lawsuits, all making similar allegations against the nation’s largest bank, have been filed in in the past month. The cases could potentially include thousands of people who traded in the precious metals market.
A combined case seeking class action status would include anyone who purchased or sold futures contracts or an option on NYMEX platinum or palladium or COMEX silver or gold between (at least) January 1, 2009, and December 31, 2015. The lawyers believe that “at least hundreds, if not thousands” of traders would be eligible to join the case.
Named as defendants in all of the lawsuits are John Edmonds, a former metals trader at JPM, a group of yet-to-be-identified precious metals traders, and the bank.
Edmonds has pleaded guilty to one count of conspiracy to defraud the market and manipulate prices of precious metals futures contracts and one count of commodities fraud. Edmonds admitted that he and other co-conspirators at JPM fraudulently manipulated the precious metals market from 2009 to 2015, the same timeframe covered in the class action suits.
Edmonds admitted that he deployed the illegal trading scheme hundreds of times with the knowledge and consent of his immediate supervisors. Plaintiffs say they have suffered economic injury, including monetary losses, as a direct result of actions by Edmonds and the other unnamed JPM metals traders in the futures and options contracts.
One of the suits alleges that “the number of unlawful trades that JPM traders executed in precious metals futures markets is at least in the thousands.”
The Justice Department’s criminal investigation is ongoing and recently caused a related civil case to be put on hold for at least six months while the government continues its investigation. That civil suit, which also accuses JPM of rigging the precious metals market, was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders.