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The settlement was disclosed late Wednesday and stemmed from US government investigations into illegal trading in futures and precious metals markets, commonly referred to as spoofing. Spoofing is a practice in which traders place orders with the intention of cancelling to move prices to benefit their market positions.
JP Morgan did not admit any wrongdoing in agreeing to settle. The settlement covers traders in Treasury futures and options between April 2008 to January 2016 and still requires approval by a federal judge.
In September 2020, JP Morgan entered a deferred prosecution agreement and agreed to pay out $920 million to settle US government probes into spoofing in Treasuries and precious metals. The $920 sum included a $436 million criminal fine, with the US banking giant also agreeing to self-report any future violations.
According to a court filing, JP Morgan’s $15.7 million payout would recover under one-third of the estimated classwide damages. Lawyers representing the traders plan to seek up to one-third of the settlement, or approximately $5.2 million, to cover legal fees.
