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JPMorgan in Talks to Settle Metal, Treasuries Spoofing Probe
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JPMorgan (JPM - Free Report) is in advanced discussions with the U.S. authorities to resolve spoofing allegations into its trading of metals futures and Treasury securities. The bank is likely to pay a fine of almost $1 billion, first revealed by Bloomberg, to settle the issue as soon as this week.
The settlement deal will end investigations by the Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission.
Notably, JPMorgan is negotiating a deferred prosecution agreement, which allows it to continue with the trading operations, provided it fulfills certain conditions. Further, it is likely that the bank will admit to wrongdoing.
Spoofing is a method wherein the traders place orders that they intend to cancel in order to move the prices in a particular direction. While submitting and cancelling orders isn’t illegal, it is against the law to trick other traders with such strategy.
Spoofing was banned after the 2008 financial crisis under the Dodd Frank regulation.
The spoofing case against JPMorgan follows filing of criminal charges against its several employees. In its latest quarterly reported filed in July, the company confirmed the probe and stated that it is continuing “to cooperate with these investigations and is currently engaged in discussions with various regulators about resolving their respective investigations.”
The penalty to be paid by JPMorgan would be a record compared with other spoofing-related fines. Over the past few years, several other global banks like Deutsche Bank (DB - Free Report) , UBS Group and HSBC Holdings (HSBC - Free Report) have been fined over similar allegations.
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JPMorgan in Talks to Settle Metal, Treasuries Spoofing Probe
JPMorgan (JPM - Free Report) is in advanced discussions with the U.S. authorities to resolve spoofing allegations into its trading of metals futures and Treasury securities. The bank is likely to pay a fine of almost $1 billion, first revealed by Bloomberg, to settle the issue as soon as this week.
The settlement deal will end investigations by the Justice Department, the Commodity Futures Trading Commission and the Securities and Exchange Commission.
Notably, JPMorgan is negotiating a deferred prosecution agreement, which allows it to continue with the trading operations, provided it fulfills certain conditions. Further, it is likely that the bank will admit to wrongdoing.
Spoofing is a method wherein the traders place orders that they intend to cancel in order to move the prices in a particular direction. While submitting and cancelling orders isn’t illegal, it is against the law to trick other traders with such strategy.
Spoofing was banned after the 2008 financial crisis under the Dodd Frank regulation.
The spoofing case against JPMorgan follows filing of criminal charges against its several employees. In its latest quarterly reported filed in July, the company confirmed the probe and stated that it is continuing “to cooperate with these investigations and is currently engaged in discussions with various regulators about resolving their respective investigations.”
The penalty to be paid by JPMorgan would be a record compared with other spoofing-related fines. Over the past few years, several other global banks like Deutsche Bank (DB - Free Report) , UBS Group and HSBC Holdings (HSBC - Free Report) have been fined over similar allegations.
Further, last month, Bank of Nova Scotia (BNS - Free Report) agreed to pay $127.4 million to resolve U.S. allegations that it engaged in spoofing of gold and silver futures contracts. The bank admitted to wrongdoing.
Shares of JPMorgan have gained 1.1% over the past six months, underperforming the industry’s rally of 4.7%.
Currently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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