By Kanishka Singh
WASHINGTON (Reuters) -Two former precious metals traders at JPMorgan Chase (NYSE:JPM) were sentenced on Tuesday for engaging in fraud, attempted price manipulation and spoofing, the U.S. Justice Department said in a statement.
Gregg Smith, 59, of Scarsdale, New York, was sentenced to two years in prison and a $50,000 fine while Michael Nowak, 49, of Montclair, New Jersey, was sentenced to one year and one day in prison and a $35,000 fine, the Justice Department said.
They were part of a market manipulation scheme that spanned over eight years from 2008 to 2016, involved tens of thousands of unlawful trading sequences, and resulted in over $10 million in losses to market participants, according to the Justice Department.
Spoofing involves placing and then quickly canceling orders to falsely create the impression of high demand or supply. It was outlawed in 2010 when the U.S. Congress passed the Dodd-Frank Act after the financial crisis.
Last year, Smith and Nowak were found guilty of fraud and other charges but acquitted of racketeering and conspiracy in a trial. Nowak was convicted on over a dozen charges including fraud, spoofing and attempted market manipulation, and Smith was convicted on 11 charges.
JPMorgan agreed in 2020 to pay more than $920 million and admitted to wrongdoing to settle with the Justice Department and the Commodity Futures Trading Commission over these and other traders' conduct.