JPMorgan to pay for $920 Million in Highest Ever Spoofing Charge

JP Morgan Chase has agreed to pay a record $920 million towards the authorities and admit to wrongdoing to stay charges of market manipulation via “spoofing” trades.

In a comment on Tuesday, the Commodity Futures Trading Commission said that JPMorgan – the largest bank in the usa – would pay $436.4 million in fines, $311.7 million in restitution and more than $172 million in disgorgement.

The settlement states that, between 2008 and 2021, traders at JPMorgan Treasury engaged in hundreds of thousands of “deceptive” trades, placing market orders and subsequently cancelling them before they may be executed.

This act, known as “spoofing”, creates the illusion of demand or a lack of demand, affecting investor sentiment and asset pricing according to the spoofer's intended outcome. In a statement, the Securities and Exchange Commission said that JPMorgan traders cancelled their fake orders after receiving “beneficially priced executions” for legitimate ones.

The $920 million figure represents the largest spoofing settlement to date, far beyond the $67.4 million penalty the CFTC levied against Tower Research Capital in 2021 – the previous record-holder.

The bank's statement also noted that the violations happened only between 2008 and 2021.