The United States Department of Justice (DOJ) which is accusing a number of former JPMorgan precious metals traders of spoofing the market, is asking the Court to admit evidence of defendants’ compensation at trial.
In a document, filed at the Illinois Northern District Court, the DOJ requests that the Court admits evidence about the compensation—consisting of a base salary and performance-based bonus—paid to the defendants and their co-conspirators while employees at JPMorgan.
According to the US Government, this type of evidence regarding compensation is admissible and directly relevant to establish the defendants’ motive and intent to engage in fraud and market manipulation.
The list of defendants includes:
- Gregg Smith, of Scarsdale, New York. Smith was an executive director and trader on JPM’s precious metals desk in New York. He joined JPM in May 2008 after it acquired another U.S. bank.
- Michael Nowak, of Montclair, New Jersey. Nowak was a managing director and ran JPM’s global precious metals desk. He joined the bank in July 1996.
- Christopher Jordan, of Mountainside, New Jersey. Jordan joined JPM in March 2006 and was an executive director and trader on JPM’s precious metals desk in New York. Jordan left JPM in December 2009 and worked as a precious metals trader at a Swiss bank (Bank C) in New York from March 2010 until August 2010. From June 2011 until October 2011, Jordan traded precious metals futures contracts as an employee of a financial service company (Company D) in New York.
The DOJ plans to introduce annual salary and bonus information for the defendants and their co- conspirators while employed by JPMorgan during the period covered by the superseding indictment (i.e., 2008–2016). Specifically, the United States expects to introduce evidence that, from 2008 through 2016, while employed at JPMorgan:
- Defendant Smith earned $9,890,044 in total (salary plus bonus) compensation;
- Defendant Nowak earned $23,700,074;
- Defendant Ruffo earned $10,425,064;
- Defendant Jordan earned $1,125,016 (2008–2009 only);
- Donald Turnbull earned $12,727,350;
- Stuart Piller earned $13,289,936;
- Michel Simonian earned $4,515,111 (2008–2014 only);
- John Edmonds earned $1,996,064 in total; and
- Christian Trunz earned $2,720,049.
Defendants’ performance-based compensation also accounted for a substantial portion of their total compensation—69% of Defendant Smith’s total compensation, 74% of Defendant Nowak’s, 70% of Defendant Ruffo’s, and 69% of Defendant Jordan’s.
The DOJ explains that this evidence of total compensation is highly probative of motive and intent for the defendants and their co-conspirators. The significant amount of compensation the defendants and their co-conspirators received (especially during and after the 2008 global recession with the attendant collapse of other banks) provided strong incentives for the defendants and their co-conspirators to keep their jobs (and the resulting income streams) by generating profits for JPMorgan, which they maximized through fraudulent and manipulative trading practices and misstatements during inquiries into their trading activity.
Back in 2019, the DOJ launched criminal proceedings against the former JPMorgan precious metals futures traders. The indictment alleges that the defendants engaged in widespread spoofing, market manipulation and fraud while working at JPMorgan through the placement of orders they intended to cancel before execution in an effort to create liquidity and drive prices toward orders they wanted to execute on the opposite side of the market.
As FX News Group has reported, the DOJ plans to call 34 witnesses to testify at trial.