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Ronan Manly

Ronan Manly

Ronan Manly is a precious metals analyst with BullionStar whose blogs
often cover current themes including what's going on in the
London gold market and the gold activities of central banks.

JP Morgan Gold Trading Boss Found Guilty

  • Date
  • Author Ronan Manly
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In a major embarrassment for banking giant JP Morgan and the London Bullion Market Association (LBMA), a federal jury in a US criminal trial has convicted Michael Nowak, global head of JP Morgan’s precious metals trading and former LBMA board member, on 13 counts of attempted price manipulation, commodities fraud, wire fraud, and spoofing prices in the gold, silver, platinum and palladium futures markets.

The same criminal trial jury, in a trial which was presided over by federal judge Edmond E. Chang of the United States District Court for the Northern District of Illinois, also convicted Nowak’s colleague and JP Morgan precious metals trader, Gregg Smith, on 11 counts of attempted price manipulation, commodities fraud, wire fraud, and spoofing. In a US federal trial, the jury the verdict has to be unanimous.

The charges against the JP Morgan global precious metals trading desk traders were brought by the US Government’s Department of Justice (DoJ) Criminal Division in a trial officially called “United States v. Smith (1:19-cr-00669)”. While the jury’s verdict found the two traders guilty of price manipulation, commodities fraud, wire fraud and spoofing, the jury also found both Nowak and Smith not guilty under one count each of a RICO conspiracy (the Racketeering Act) and a 371 conspiracy (conspiracy to defraud the United States).

Jamie Dimon, chairman and CEO of JP Morgan Chase

Its important to remember also that this trial of Nowak, Smith and Ruffo is part of the same criminal investigation under which JP Morgan paid a record US$ 920 million using a deferred prosecution agreement (DPA) with the DoJ in September 2020.

Multi Year Market Manipulation

The JP Morgan precious metals traders’ trial, which has generated a lot of media interest, began in Chicago on 8 July 2022 and continued until 29 July, after which the jury deliberated until 10 August before coming to a verdict.

As explained by the US Department of Justice (DoJ) in a 10 August post-verdict press release titled “Former J.P. Morgan Traders Convicted of Fraud, Attempted Price Manipulation, and Spoofing in a Multi-Year Market Manipulation Scheme”, the crimes of price manipulation and spoofing by JP Morgan’s traders took place:

“in a multi-year market manipulation scheme of precious metals futures contracts that spanned over eight years and involved thousands of unlawful trading sequences.”

Let’s repeat that.

Eight years! Thousands of unlawful trading sequences!

And not by some two-bit basement hustlers, but by JP Morgan’s global head of precious metals Nowak and his chief lieutenant Smith.

David Meister, formerly of the CFTC “Watchdog" and now the defense attorney for JP Morgan’s Michael Nowak

LBMA Board Member

And Nowak was not just any old former LBMA board member back in the mists of time. Nowak was actually still a board member of the LBMA on the very day (Monday 16 September 2019) when the US Department of Justice indictment against him was unsealed, charging Nowak with federal crimes. See BullionStar article “LBMA Board Member & JP Morgan Managing Director Charged with Rigging Precious Metals” from 17 September 2019.

Back in September 2019, the LBMA then inexplicably did nothing for almost a full work week, before being forced, on Friday 20 September 2019, to remove Nowak from the LBMA Board. See BullionStar article “LBMA Removes JP Morgan’s Michael Nowak from the LBMA Board” from 20 September 2019. 

Nowak, for example, was an attendee at the LBMA Board meeting on 12 July 2019, the last meeting before be was removed from the LBMA Board. See minutes of the LBMA Board meeting on 12 July 2019.

Minutes of LBMA Board meeting, 12 July 2019

The 8 years in question over which JP Morgan’s Michael Nowak and Gregg Smith have now been convicted of being engaged in a “widespread spoofing, market manipulation, and fraud scheme” spanned the period between “approximately May 2008 and August 2016”.

Specifically, per the DoJ press release:

“The defendants engaged in thousands of deceptive trading sequences for gold, silver, platinum, and palladium futures contracts traded through the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by CME Group Inc.

These deceptive orders were intended to inject false and misleading information about the genuine supply and demand for precious metals futures contracts into the markets.”

A third member of the same JP Morgan team, precious metals desk salesman, Jeffrey Ruffo, who was also on trial in Chicago along with Nowak and Smith, was acquitted by the federal jury. Ruffo had only been charged with a RICO conspiracy and a 371 conspiracy and was found by the jury to be not guilty on both of those charges.

The reason the RICO and 371 conspiracies were part of this trial is that in addition to the charges against the JP Morgan precious metals traders of attempted price manipulation, commodities fraud, wire fraud and spoofing, the US Department of Justice’s indictment against Nowak, Smith, Ruffo (and a 4th JP Morgan trader Christopher Jordan) included conspiracy under the RICO Act and engaging in a conspiracy.

The RICO Act refers to the US Racketeer Influenced and Corrupt Organizations Act (RICO Act). Specifically, the latest (pre-trial) indictment filed by the DoJ on 16 November 2021 included charging each of Nowak, Smith, Ruffo and Jordan with one count of RICO conspiracy and one count of “371 conspiracy”.

A 371 conspiracy refers to the US general conspiracy statute (18 U.S.C. § 371) where “two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose. In short, the 371 conspiracy statute “prohibits conspiracies to defraud the United States”. 

The reason Christopher Jordan was not on trial with Nowak, Smith and Ruffo during July 2022 was that back in 2020, Jordan’s lawyers successfully convinced a Chicago federal judge that Jordan should have a separate trial “citing concerns about unfair treatment if tried alongside the others”. Talk about fear of ‘guilty by association”.

Christopher Jordan is therefore now awaiting his own trial in the future, at a date yet to be scheduled.

JP Morgan’s Michael Nowak (centre) arriving for court in Chicago during July 2022

The Charges

At the same time though, Christopher Jordan’s name continued to be listed in all the DoJ indictments submitted to the court, including the latest one dated 16 November 2021, which reads as follows:


1 Gregg Smith count(s) 1ss, 2ss, 3ss, 5ss-12ss, 24ss, 26ss,

2 Michael Nowak count(s) 1ss, 2ss, 4ss, 13ss-22ss, 25ss, 27ss,

3 Jeffrey Ruffo count(s) 1s, 2s,

4 Christopher Jordan count(s) 1ss, 2ss, 23ss (lma, )

(Entered: 11/17/2021)

See document number 448 here, on the Court Listener website

The various numbers relating to the counts are explained as follows:

1ss = Count 1 = RICO conspiracy

2 ss = Count 2 = 371 Conspiracy

3ss & 4 ss = Counts 3 (Smith) and Count 4 (Nowak) = Attempted price manipulation

5ss-12ss & 13ss-22ss = Counts 5-12 (Smith) and Counts 13-22 (Nowak) = Wire fraud

24ss & 25ss = Counts 3 (Smith) and Count 4 (Nowak) = Commodities fraud

26ss & 27ss = Count 26 (Smith) and Count 27 (Nowak) = Spoofing

For a definition of Commodities Fraud, see the DOJ page here. For a definition of Wire Fraud, see the DoJ page here. Wire Fraud is any fraud (intentional deception for monetary or personal gain) committed via an electronic from of communication, and that is ‘interstate’ in nature, and is usually investigated by the FBI.

The Verdict: Nowak guilty of 13 counts, Smith guilty of 11

Fast forward to 10 August and the federal jury in the “United States v. Smith (1:19-cr-00669)” trial handed down its verdict, a verdict which found:

  • • Nowak guilty of attempted price manipulation, commodities fraud, wire fraud and spoofing (i.e. guilty of 4 different offences under 13 counts)
  • • Smith guilty of attempted price manipulation, commodities fraud, wire fraud and spoofing (i.e. guilty of 4 different offences under 11 counts)
  • • And which acquitted Ruffo

The full jury verdict (as per the Docket Entry of the Court Clerk) source reads as follows:

This docket entry was made by the Clerk on Wednesday, August 10, 2022:

 MINUTE entry before the Honorable Edmond E. Chang:

Jury deliberations held.

Jury reaches a verdict on the three trial Defendants and on all the charges.   

[A.] Defendant Smith found not guilty on Counts 1 (RICO conspiracy) and 2 (371 conspiracy); guilty on Count 3 (attempted price manipulation); guilty on Counts 5 through 12 (wire fraud); guilty on Count 24 (commodities fraud); and guilty on Count 26 (spoofing).

[B.] Defendant Nowak found not guilty on Counts 1 (RICO conspiracy) and 2 (371 conspiracy); guilty on Count 4 (attempted price manipulation); guilty on Counts 13 through 22 (wire fraud); guilty on Count 25 (commodities fraud); and guilty on Count 27 (spoofing).

[C.] Defendant Ruffo found not guilty on Counts 1 (RICO conspiracy) and 2 (371 conspiracy). Defendant Ruffo is discharged and dismissed from this case and release conditions are vacated. Pretrial Services shall return Defendant Ruffo’s passport.

[D.] Rule 29 and 33 motions are due on 09/21/2022. The government’s combined response is due on 10/26/2022. The defense replies are due on 11/16/2022.

[E.] The courtroom deputy will contact the lawyers about sentencing dates in 2023. The case is referred to the Probation Office for PSR preparation. Emailed notice (eec)


Eagle eyed readers may have spotted that count 23 of the DoJ indictment was not addressed by the jury in the Nowak-Smith-Ruffo trial. This is because that charge relates to Christopher Jordan, and will be addressed in Jordan’s separate trial.

Points D and E on the jury verdict Docket Entry are interesting. Point D says that “Rule 29 and 33 motions are due on 09/21/2022”.

Rule 29 in US federal courts refers to a “motion for judgement of acquittal”. Rule 33 refers to the ability of defendants asking for a new trial. So given these possibilities, and the subsequent responses and replies, these legal routes, if used, could drag on until mid-November.  

As per point [E], a sentencing date will be scheduled for 2023. The ‘PSR’ in point [E] is an abbreviation for a “Pre-Sentence Report”. A “Pre-Sentence Report” is a report prepared by a probation officer upon conviction of a defendant which helps the judge determine what sentence to impose.

Nowak’s attorney, David Meister (who unbelievably at one time was Head of Enforcement at the CFTC until 2013), stated on 10 August that Nowak will now fight the trial jury verdict:  

“‘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.

Gary Gensler – Former head of US CFTC. Now head of US SEC

Conspiracy Charges – Edmonds and Trunz

It’s important to remember that while this trial was brought by the US Department of Justice’s Criminal Division, it arose out of a joint investigation by the DoJ, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) into JP Morgan and market manipulation, and the investigation also had the help of the Federal Bureau of Investigation (FBI) and CFTC. As per the DoJ’s 10 August press release:

The FBI’s New York Field Office investigated the case. The Commodity Futures Trading Commission’s Division of Enforcement provided assistance in this matter.

It’s also important to remember that during the trail of JP Morgan’s Nowak, Smith and Ruffo, the prosecution’s witnesses included former colleagues of the JP Morgan precious metals traders, namely John Edmonds, Christian Trunz, and Corey Flaum, all three of whom testified during the trial.

John Edmonds and Christian Trunz formerly worked as precious metals traders on the JP Morgan global precious metals desk, and Corey Flaum was a colleague of Gregg Smith when they both worked as precious metals traders at Bear Stearns.

The reason that Edmonds, Trunz, and Flaum were testifying in the Nowak-Smith-Ruffo trial on behalf of the US Government is that each of Edmonds, Trunz, and Flaum had already pleaded guilty in their own trials, and then agreed to testify on behalf of the prosecution in the Nowak-Smith-Ruffo trial that there was a conspiracy between the traders, and that the price manipulations and spoofing occurred in the context of the desk traders conspiring.

Court cases taken by the US DoJ against precious metals traders and their employers, the LBMA bullion banks. JP Morgan leads the rankings. Source.

The very heart of the Department of Justice charges is that there was a crime ring, and a conspiracy within the JP Morgan global precious metals desk (a global desk which is located in New York, London and Singapore).

For example, the DoJ titled it’s 16 September 2019 press release when charging Nowak, Smith and Ruffo as “a Multi-Year Market Manipulation Racketeering Conspiracy”, saying that “the defendants and their co-conspirators were members of [JP Morgan’s] global precious metals trading desk in New York, London and Singapore”, and:

“As it relates to the RICO conspiracy, the defendants and their co-conspirators were allegedly members of an enterprise—namely, the precious metals desk at [JP Morgan] – and conducted the affairs of the desk through a pattern of racketeering activity, specifically, wire fraud affecting a financial institution and bank fraud.”

Edmonds and Trunz even pleaded guilty to there being a conspiracy on the JP Morgan precious metals desk.

Specifically, John Edmonds pleaded guilty (on 9 October 2018) in the District of Connecticut to:

commodities fraud and a spoofing conspiracy in connection with his participation in fraudulent and deceptive trading activity in the precious metals futures contracts markets”,

And Edmonds admitted that:

from approximately 2009 through 2015, he conspired with other precious metals traders at the Bank to manipulate the markets for gold, silver, platinum and palladium futures contracts traded on the COMEX and NYMEX.

Edmonds even “admitted that he learned this deceptive trading strategy from more senior traders at the Bank [JP Morgan]”.

On 20 August 2019, Christian Trunz, “a former precious metals trader at the London, Singapore and New York offices of JP Morgan” (yes Trunz was based in all 3 locations at various times) pleaded guilty in the Eastern District of New York “to one count of conspiracy to engage in spoofing and one count of spoofing in connection with his precious metals futures contracts trading at JPMorgan” and admitted that:

between approximately July 2007 and August 2016, [he] placed thousands of orders that he did not intend to execute for gold, silver, platinum and palladium futures contracts traded on the NYMEX and COMEX)."

Trunz even said that he “learned to spoof from more senior traders, and spoofed with the knowledge and consent of his supervisors.

Corey Flaum (who worked with Gregg Smith at Bear Sterns before Smith moved to JP Morgan) also pleaded guilty (on 25 July 2019) to attempted commodities price manipulation and admitted that: “between approximately June 2007 and July 2016, [he] placed thousands of orders to manipulate the prices of gold, silver, platinum and palladium futures contracts traded on COMEX and NYMEX.

See here for Edmonds testimony, here for Flaum’s testimony, and here for Trunz’s testimony.

A Typical “Racketeering" Enterprise?

As to why the federal jury didn’t find Nowak and Smith (and Ruffo) guilty on the counts of the RICO conspiracy and the 371 conspiracy, that is something that only the jury knows.  

Maybe the jury could not grasp what exactly a racketeering enterprise is defined as, and the Court didn’t explain it. This may sound like a joke, but on 27 July 2022, just before the jury began its deliberations, the Court told the jury as follows:

On closing arguments, the Court sets the following directives based on certain incidents at trial so far. …  (3.) No evidence has been introduced on what a typical “racketeering" enterprise is like (nor would it likely have been allowed), so there can be no argument on that topic.

See Note 651 about the trial on the Court Listener website here.

Why exactly evidence on what a typical racketeering enterprise looks like “would likely not have been allowed” will have to be left to US federal court experts to interpret. Maybe the defense attorneys were terrified that the prosecution would show the jury some photos of “The Godfather” and JP Morgan’s precious metals desk side by side, asking them to “spot the difference”.

Modern day trading desks use a myriad of chat apps and messaging apps integrated into their trading workflow. Were the chat app messages of the defendants and their trading colleagues at JP Morgan not submitted as evidence and shown to the jury?  And likewise, were the chat app messages of the JP Morgan defendants and their trading colleagues that they sent and received from traders at other bullion banks not submitted as evidence and shown to the jury? 

In any case, the DoJ’s prosecution lawyers and their witnesses (Edmonds, Trunz and Flaum) did inform the jury as to what they think a racketeering enterprise looks like – See Exhibit 1 below.

Exhibit 1

CFTC Silver Investigation – Gensler – Meister – Nowak

Before wrapping up, an interesting Note appeared during the Nowak -Smith trial which the Commodity Futures Trading Commission (CFTC) would probably prefer to forget, so I will highlight it here. Its about silver price manipulation.

First off, here’s some background about how, in 2013, the CFTC closed down a five year investigation into silver price manipulation, claiming they had found no evidence of any wrongdoing. As explained in a BullionStar article from 4 March 2021:

For anyone familiar with the CFTC and the silver market will immediately have raised their eyebrows that the CFTC “remains vigilant in surveilling these markets for fraud and manipulation.”

As a reminder, this is the same CFTC that on 25 September 2013 after a 5-year investigation into whether the COMEX silver futures market was manipulated by JP Morgan and other banks, closed down the investigation, saying that its Division of Enforcement and Division of Market Oversight had found no evidence of wrongdoing, despite spending 7,000 staff hours on said investigation since 2008. The CFTC head of enforcement at that time was David Meister, who then left the CFTC only one week after closing down the silver investigation, in a job well done.

Chairman of the CFTC at that time was Gary Gensler [who is now head of the SEC]. Meister, a lawyer by profession, returned to Wall Street and his former law firm Skadden, and is now head of Skadden’s government enforcement and white collar crime group in New York.”

Not only that, but the CFTC’s silver market investigation that ran from 2008 -2013 was only one of three investigations into the silver market manipulation that the CFTC held starting in 2004. From Bloomberg:   

And three times, starting in 2004, the Commodity Futures Trading Commission also looked into allegations of market manipulation of the silver market by JPMorgan.

The CFTC closed the third of those three inquiries in 2013 without taking action.

The Gensler Whisperer

Not only that, but would you believe that the same David Meister (who left the CFTC in 2013 after closing down the CFTC investigation into silver market manipulation) was Michael Nowak’s defense attorney in the Nowak July 2022 federal trial and is the attorney for Nowak’s probable appeal. You probably wouldn’t believe it, except for the fact that it’s true.

This is the same David Meister who Chambers, the global authority on lawyer bios and profiles, calls “the Gensler Whisperer”. Yes, you read that correctly. Chambers says:

“David is killing it. People call him the ‘Gensler Whisperer’.

You’ve probably heard of dog whisperers, and even horse whisperers. But a Gensler Whisperer? Does this mean that David Meister was able to whisper to Gensler to back off CFTC investigations, and could it have anything to do with calling off the CFTC’s silver market manipulation investigation back in 2013?

Now back to the Note. On 8 July 2022, on the subject of silver-investigation limiting instructions, a note was added as part of the Opening statements which said:

Government Exhibits 369 and 370 relate to a separate civil investigation by the U.S. Commodity Futures Trading Commission (CFTC) into complaints about silver prices. The CFTC’s separate investigation was not part of the Department of Justice’s investigation that led to the prosecution in this case, and the complaints about silver prices are not at issue in this case.

During its investigation, the CFTC interviewed a number of individuals, including Mr. Nowak. Government Exhibits 369 and 370 are excerpts of Mr. Nowak’s interview by the CFTC in 2010. For your background information, the CFTC closed the inquiry without bringing claims against any company or person.

See Note 604 from Court Listener coverage of the trail, link here.

So now, given that the CFTC interviewed Michael Nowak in 2010 as part of its investigation into silver price manipulation, but then closed down that investigation in 2013 after finding nothing, and given that now that the federal jury has found Nowak guilty of attempted price manipulation, commodities fraud, wire fraud and spoofing, does this mean the CFTC will want to interview Michael Nowak again?

Enquiring minds would like to know.


Upon hearing of the jury’s verdict against JP Morgan’s Nowak and Smith on 10 August, the Department of Justice’s Assistant Attorney General (AG) Kenneth A. Polite, Jr. commented that:

“Today’s jury verdict demonstrates that those who seek to manipulate our public financial markets will be held accountable and brought to justice.

The DoJ’s assistant AG also said that:

with this verdict, the Department has secured convictions of ten former traders at Wall Street financial institutions, including JPMorgan, Bank of America/Merrill Lynch, Deutsche Bank, The Bank of Nova Scotia, and Morgan Stanley.

However, why did the Department of Justice’s  period of investigation only cover the 8 years from 2008 up to August 2016 but not since then? What about from August 2016 up August 2022? Another full 6 years has elapsed since then. Did JP Morgan and the other convicted LBMA bullion banks’ trading desks suddenly stop spoofing manipulating precious metals prices in August 2016?

Are we to believe that no commodities fraud, price manipulation, spoofin or fraud has occurred on the COMEX since August 2016?

What does the LBMA, the self-styled world’s authority on precious metals, have to say now that one of it’s board members, Nowak (indicted in September 2019 while he was on the LBMA Board), has now been found guilty by a US Federal trial jury on 13 counts of attempted price manipulation, commodities fraud, wire fraud and spoofing prices in the gold, silver, platinum and palladium futures markets?

JP Morgan is still at the core of the LBMA. Specifically, JP Morgan is a LBMA market making member, a LBMA London vault operator, a LBMA clearing member (via LPMCL), a direct participant in the LBMA Gold Price and LBMA Silver Price daily auctions, and a representative on various LBMA committees. JP Morgan is also a market making member of the LBMA’s sister organisation, the London Platinum and Palladium Market (LPPM).

Likewise, given that the JP Morgan global precious metals trading desk spans the 3 locations of New York, London and Singapore, how will the Singapore Bullion Market Association (SBMA) and the US COMEX react to this jury verdict? And will other regulators such as the UK’s Financial Conduct Authority (FCA) and Singapore’s Monetary Authority (MAS) now launch investigations against JP Morgan’s precious metals desk?

For full details of how entrenched JP Morgan is in the LBMA, and LPPM and the SBMA and COMEX, see the recent BullionStar article “Despite manipulating precious metals prices, JP Morgan is still at the heart of the LBMA, SBMA and COMEX.

Finally, will the LBMA now make a statement distancing itself from JP Morgan, and move to expel JP Morgan from its membership, or will the LBMA carry on, pretending that the convictions of four JP Morgan precious metals traders (Nowak, Smith, Edmonds and Trunz) by the US DoJ is of no concern to the integrity of the commodities markets and has no bearing on its own code of conduct and best practices, the LBMA Global Precious Metals Code, a code which JP Morgan has signed.


Maybe the LBMA could even invite Nowak back on to the LBMA Board when the dust settles, if he appeals the jury verdict, or even from behind bars. Because according to Michael Nowak’s LinkedIn profile, Nowak is still a JP Morgan employee, not former, but very much still ‘Managing Director at J.P. Morgan’ an also still J.P. Morgan’s ‘Global Head of Base and Precious Metals Trading’ from July 1996 to ‘Present’.  

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