Jury Convicts Precious Metal Traders in Market Manipulation Scheme

A federal jury convicted two former precious metal traders on charges of (i) fraud, (ii) attempted price manipulation and (iii) spoofing for their involvement in a multi-year market manipulation scheme.

In a case before the United States District Court for the Northern District of Illinois, the DOJ presented evidence that the former traders (i) placed orders with the intention "to cancel them before execution in order to drive prices on orders they intended to execute on the opposite side of the market[,]" and (ii) engaged in deceptive trading sequences for gold, silver, platinum and palladium futures contracts. The DOJ also charged the two traders, plus a third individual, with racketeering and conspiracy to engage in a pattern of racketeering activity. The defendants were acquitted of those charges in their entirety.

These convictions come after two other commodities traders at the same institution were convicted on similar charges in 2018. In 2020, the firm agreed to pay over $920 million to settle parallel wire fraud charges with the DOJ, the SEC and the CFTC. That settlement, connected to unlawful trading in the markets for precious metals futures contracts and Treasury futures contracts, as well as in the secondary market for Treasury notes and bonds, is the largest fine ever reported to settle market manipulation charges.