PanamaTimes

Saturday, Oct 24, 2026

Ex-JPMorgan traders cleared of racketeering, found guilty of fraud

Ex-JPMorgan traders cleared of racketeering, found guilty of fraud

Case is seen as Justice Department's most aggressive to date targeting a manipulative futures trading tactic

Three former JPMorgan Chase & Co. employees were acquitted of racketeering and conspiracy charges in a landmark futures manipulation trial on Wednesday, although two were found guilty on other charges including fraud, a Department of Justice spokesperson said.

The case against the bank's former global precious metals desk head Michael Nowak, precious metals trader Gregg Smith and salesperson Jeffrey Ruffo is seen as the Justice Department's most aggressive to date targeting a manipulative futures trading tactic known as spoofing.

Nowak was convicted on 13 other charges including fraud, spoofing and attempted market manipulation, and Smith was convicted on 11 charges. Ruffo, who was only charged with racketeering and conspiracy, was acquitted of both. All three men had pleaded not guilty.

While financial reform advocates hailed the convictions as a clear signal that Wall Street executives are not above the law, attorneys said it underscored the difficulty of proving the more ambitious charges of racketeering and conspiracy.

Spoofing involves placing and then quickly canceling orders to falsely create the impression of high demand or supply. The three defendants were accused of using the tactic to manipulate futures on precious metals futures between 2008 and 2016.

"While we are gratified that the jury acquitted Mr. Nowak of racketeering and conspiracy, we are extremely disappointed by the jury's verdict on the whole, and will continue to seek to vindicate his rights in court," Nowak's attorney David Meister said.

Attorneys for Smith and Ruffo did not immediately provide comment.

Defense attorneys argued during the trial that Smith and Nowak's orders were not fraudulent. Ruffo was not a trader, and there was no evidence that he understood others were using illicit tactics, his attorney told jurors.


Their trial in Chicago began July 8 and hinged on testimony from two former JPMorgan metals traders who had pleaded guilty and cooperated with the government, as well as trading data that prosecutors said showed Smith and Nowak engaged in a repeated pattern of spoofing.

An American flag waves outside the U.S. Department of Justice Building in Washington, U.S., December 2, 2020. 


The case is part of a push by the Justice Department to crack down on spoofing and commodities market manipulation more broadly.

Spoofing was outlawed in 2010 when Congress passed the Dodd-Frank Act after the financial crisis. Since then, prosecutors have argued that earlier instances constituted fraud.

The racketeering statute, a federal law enacted in 1970 to take down the mafia, is rarely used to prosecute corporate crime. It allows prosecutors to charge a group of individuals, including those indirectly involved in alleged wrongdoing, on the basis they participated in a "criminal enterprise."

While the law also allows prosecutors to seek prison sentences of up to 20 years, Wednesday's verdict highlights that the charge can be tough to prove when it comes to competing traders on desks, said Robert Frenchman, a partner at Mukasey Frenchman LLP who was part of a trial team in 2018 that won a full acquittal for former UBS trader Andre Flotron.

Flotron had been charged with a single count of conspiracy to engage in commodities fraud.

"The reality is that traders have competing interests, run their own trading books, and often conduct themselves more like rivals than co-conspirators," Frenchman said.

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Breaking With the Past: One of the World’s Smallest Countries Changes Its Name
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Cuba’s Grid Fails Again as Fuel Crisis Deepens
Nazca Lines Flight Crash Kills Thirteen as Peru Suspends Aerodiana
OpenAI Faces Demands for Full Disclosure After Models Breach Hugging Face
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Spain Defeats Argentina in Extra Time to Win Second World Cup
Venezuela’s Earthquake Devastation Turns U.S. Investment Opportunity Into a Thirty-Seven Billion Dollar Reconstruction Challenge
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The AI Race Enters Its Infrastructure Era
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
×