JPMorgan 2020: the metals and Treasuries spoofing matter

On 29 September 2020 the CFTC issued an order finding that three JPMorgan entities engaged in spoofing and manipulation in precious metals and Treasury futures from at least 2008 to 2016. It ordered $920.2 million in restitution, disgorgement and penalty, offset by payments to the SEC and DOJ. The firms did not admit the CFTC findings, except as admitted elsewhere.

Published 2026-10-04 · 10 min read

On 29 September 2020 three federal bodies announced resolutions of one body of trading by JPMorgan’s metals and Treasuries desks on the same day. The Commodity Futures Trading Commission (CFTC) issued an order against three JPMorgan entities, the Securities and Exchange Commission (SEC) issued a separate order against one of them, and the Justice Department, according to the CFTC’s release, entered a deferred prosecution agreement with the holding company. This post reads the CFTC and SEC documents themselves, not only the library’s records, and says what they found, what the money is, and where the three outcomes overlap. As with every record here, the checking was done by an AI agent against the primary documents, with no lawyer review; see what reading every record found.

The documents

The library holds two records for the matter. The CFTC record (release 8260-20, with the order, CFTC docket 20-69) and the SEC record, an administrative order in file no. 3-20094, which the SEC published at 33-10858. No Justice Department document is in the library. What is known about the criminal side comes only from the CFTC’s release and order, which is covered below, so nothing on this page describes the terms of that agreement.

Who the respondents were

The CFTC order names three respondents: JPMorgan Chase & Co., the holding company; JPMorgan Chase Bank, N.A., a national bank whose precious metals traders worked from New York, Singapore and London as one global unit; and J.P. Morgan Securities LLC, a registered futures commission merchant whose Treasuries desk traded for it, and through which both desks cleared their futures trades. The SEC order names only the securities firm. The orders identify no individual trader by name. They refer to numbered traders, and the library has no person record for any of them.

What the CFTC order found

The CFTC order is a settlement. The firms made an offer of settlement and neither admitted nor denied the findings, except to the extent they admit them in a related action by or agreement with the Justice Department or another agency. They consented to the findings being treated as established in other CFTC proceedings. Within that frame, the order finds that traders on the two desks placed hundreds of thousands of orders in gold, silver, platinum and palladium futures and in Treasury note and bond futures, with the intent to cancel them before execution. It describes a pattern: a smaller order the trader wanted filled, and on the opposite side a large resting order, or a rapid series of them, that the trader meant to cancel. The order finds the aim was, in many instances, to move the price so the genuine order filled at a better level, and that in many instances prices did become artificial.

The order gives dated examples, one of which can stand for the rest. On 20 July 2009 a Treasuries trader entered a genuine order to sell 100 lots of a bond future, then six layered buy orders totalling 1,800 lots; the genuine order filled within milliseconds of the sixth, and the buy orders were cancelled less than a second after. Other examples run from 2008 to 2016 and include a silver trade on 12 December 2011 that the order says was used to help fill a hedge fund client’s order to sell 1.6 million ounces. The order also finds that on occasion the precious metals traders traded to push prices toward or away from the trigger levels of “barrier” options the firm held, and it finds the head of each desk took part.

Four findings matter for what they say about the firm, not the traders.

Spoofing and manipulation were found against all three entities. The order finds violations of the Commodity Exchange Act’s price manipulation section (9(a)(2)) for the whole period, its spoofing provision (4c(a)(5)(C)) for conduct on or after 16 July 2011, and the anti-fraud manipulation provisions and Regulations 180.1 and 180.2 for conduct on or after 15 August 2011. The parent is held responsible for all of it as the ultimate parent, and the two operating entities for their own traders, under the Act’s rule that a firm answers for its agents’ acts within the scope of their work.

The securities firm failed to supervise. Regulation 166.3 applies to a registered futures commission merchant, and the order finds the firm failed to detect, investigate and stop the conduct. It says the surveillance system could not effectively identify spoofing before 2014, and that after a newer tool arrived in 2014 the firm still failed despite red flags: internal alerts, inquiries from the exchange operator and the CFTC, and an internal allegation of misconduct from one of its own traders.

Early cooperation was found unsatisfactory. The order says that in the early stages of the investigation the firm answered some information requests late, incompletely or in a way that misled the CFTC’s enforcement staff, and then that later cooperation was substantial. The order says it set the penalty after taking both stages into account.

The scheme was quantified. The order says it benefited the firms by $172,034,790 and caused market losses of $311,737,008. Those two numbers are, to the dollar, the order’s disgorgement and restitution totals, which is how the money below is built.

What the SEC order found

The SEC order covers different ground. It finds that between April 2015 and January 2016 traders on the securities firm’s Treasuries desk carried out hundreds of manipulative trading events in cash Treasury securities, placing genuine orders on one side and layered orders they did not intend to execute on the other, and cancelling the latter after the genuine order filled. It describes the same pattern running back to February 2009 and calls the firm’s profit from it illicit. The firm’s own policies and two compliance bulletins, of July 2013 and December 2015, prohibited the technique. The SEC order finds a single violation, of Section 17(a)(3) of the Securities Act, which prohibits fraud or deceit on a purchaser in the offer or sale of securities, found to be wilful. The firm admitted the facts in the order and acknowledged the violation, which the CFTC order does not record. The SEC censured the firm and imposed $10 million in disgorgement and a $25 million civil penalty, with the penalty reduced by the amount of the CFTC penalty.

So the two orders do not describe the same trades. The CFTC order is about futures, with the Treasuries desk’s cash-market spoofing described as part of the same pattern. The SEC order is about cash Treasuries over a shorter window. Both come from the same desk and the same technique, which is why they were announced together.

The money, and why it cannot be added up

The CFTC release calls $920.2 million the largest amount of monetary relief the agency had ever imposed, and the highest restitution, disgorgement and penalty in any spoofing case. Those are the CFTC’s own comparisons and we have not tested them. The order’s five components add to $920,203,609:

Several cautions apply, and each changes how a headline should be read.

1. The total is a ceiling on CFTC relief, not a payment. The order says restitution will be offset by restitution paid under the Justice Department agreement, and disgorgement by criminal disgorgement paid under that agreement and by disgorgement paid under the SEC order. The agreement’s amounts are not in the CFTC release or in the library, so the net sum JPMorgan paid across all three bodies cannot be calculated here.
2. The two regulators’ figures overlap. The SEC’s $25 million penalty is offset by the CFTC penalty, and the SEC’s $10 million disgorgement counts toward the CFTC disgorgement. Adding the SEC record’s $35 million to the CFTC record’s $608.5 million would count the same dollars twice. The library stores penalty and disgorgement separately so that totals are not double-counted, and it carries no restitution field, so the $311.7 million is only in the narrative.
3. Disgorgement here is written as an undertaking. The order lists it among the undertakings in the offer of settlement, as well as ordering the payment. The library records it as disgorgement, which matches the substance, but it is the record’s reading.
4. The penalty is not a spoofing-only figure. One penalty covers manipulation, spoofing and the supervision failure together, and the spoofing enforcement charts say so wherever this record’s $436 million appears.
5. Restitution is an obligation, not a measure of loss proved in court. The $311.7 million is the order’s number, agreed in a settlement. Nothing we read shows how it was calculated or how much has been distributed.

The criminal and related matters

The CFTC release states that on the same day the Justice Department’s Fraud Section and the U.S. Attorney’s Office for the District of Connecticut announced a deferred prosecution agreement with the holding company, deferring prosecution on wire fraud charges, under which the company agreed to pay a criminal fine, disgorgement and restitution. A deferred prosecution agreement is an agreement not to proceed so long as terms are kept; it is not a conviction, and we did not read it. That is why the library flags the CFTC record as having a criminal parallel and nothing more. The criminal-parallel post records the same fact in its list of cases where no date separates the civil and criminal steps.

The release also lists related CFTC actions. It names two traders who had settled with the CFTC and entered cooperation agreements, John Edmonds (release 7983-19) and Christian Trunz, and two it was still litigating against, Michael Nowak and Gregg Smith. The library holds Trunz (release 8014-19, an order finding spoofing at two New York banks from 2007 to 2016 that reserves sanctions given his cooperation, and which says he pleaded guilty), the 2019 Nowak and Smith record (a civil complaint alleging spoofing and attempted manipulation, filed the day a criminal indictment was unsealed) and the 2026 record of their consent orders, in which a CFTC release of 16 January 2026 reports penalties of $200,000 and $150,000 and bans of three years and six months, and says both had been convicted in the criminal case. Those releases do not name the employer, so the library does not assert that the traders are the JPMorgan desks’ traders; the 2020 release lists them as related. We did not look for the Edmonds release, so it has no record here.

What the matter established

It established, as consented findings, that a large bank group’s own desks spoofed for years across two asset classes. Two federal regulators found it, one on admitted facts, in orders that give times, quantities and prices. The CFTC order finds heads of both desks took part, and the SEC order describes a desk-wide pattern.

It established liability above the trader. Under the order, the holding company answers for conduct it did not itself place, and a supervision finding applies to the registered firm. The supervision section is the order’s longest list of what a compliance system did not do, and is read for that in how spoofing gets caught.

It recorded that cooperation was weighed in two stages. The order separates unsatisfactory early cooperation from substantial later cooperation and says both entered the penalty. It does not say by how much each moved it, so the order shows direction, not size.

What it did not establish

• No individual was found liable in these orders. The traders are numbered, not named; the order imposes nothing on any person.
• The CFTC findings were not admitted by the firms, other than to the extent admitted in the Justice Department or other agency resolutions, which we have not read. The SEC order is different: the firm admitted its facts.
• No court tested any of it. Both orders are administrative, entered by settlement. The CFTC order says its findings can be used in other CFTC proceedings, with narrow exceptions such as a bankruptcy or enforcing the order, but not as the sole basis of other proceedings against the firms.
• It does not show that every order the desks cancelled was a spoof. The order finds “hundreds of thousands” of spoof orders and illustrates with dated examples; it does not give a count or a share of the desks’ orders.
• It does not show the price effect. The order finds artificial prices “in many instances”, not in all, and gives no distribution of effects.
• Causation of any market-wide outcome is not claimed, by the regulators or by this site. The losses are the order’s own measure, entered by consent.
• It does not show that one firm is typical. The library holds more than a hundred spoofing and layering actions; see the spoofing technique page, the layering page and the price manipulation page for how this matter fits among them. The tags are ours; the agencies charge statutory provisions.

Where to read next

The teardown of a spoofing case shows the order-book mechanics in detail, and what the sanctions show puts this matter’s penalty against the library’s distribution. The CFTC announced eight other spoofing actions on a single day in January 2018, covering three banks whose penalties were an order of magnitude smaller; that day is described in the 29 January 2018 announcement. To report an error in either record, use the link on its page or write to [email protected] with the slug and a link to the document.

Techniques referenced

• Spoofing — Spoofing is placing orders a trader intends to cancel before execution, to create a false impression of supply or demand and move the price toward a smaller genuine order on the other side.
• Layering — Layering is placing multiple orders at several consecutive price levels with no intention of trading them, building an apparent wall of depth that pushes the price toward a genuine order on the other side.
• Price manipulation — Price manipulation is trading intended to create an artificial price — one that does not reflect genuine supply and demand — and it is the general charge a regulator brings when the conduct does not fit a more specific named technique.

Cases referenced

Reviewed October 4, 2026. Spotted an error? Tell us.