Two Ex-JP Morgan Metals Traders Convicted of Fraud

    Photo: Getty Images [via Business Insider]

    The Facts

    • On Wed., a Chicago federal jury convicted JPMorgan's former top gold trader, Gregg Smith, and former head of the bank's precious metals desk, Michael Nowak, of manipulating gold prices.

    • Spoofing, which was outlawed by the 2010 Dodd-Frank Act, is defined as quickly placing and withdrawing buy and sell orders to create the false impression of a certain level of demand.

    The Spin

    Pro-establishment narrative

    With spoofing having been illegal for over a decade now, this is good news for anyone who's been waiting for stock market manipulators to face justice. By working at one of the largest banks in the world, these men had the power to manipulate the entire gold market, and this time they didn't get away with it.

    Establishment-critical narrative

    Thankfully these men were acquitted on the bogus charges of racketeering, but the jury wrongfully correlated typical trading practices with criminal activity. The prosecution - which lacked any real evidence of intent of spoofing - cherry-picked a scattering of trades as misleading "proof," which the jury clearly didn't question.

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