Former JPMorgan Traders’ Spoofing Convictions Affirmed on Appeal

Three former JPMorgan traders found guilty of manipulating the prices of precious metals futures lost appeals challenging their fraud convictions after the Seventh Circuit said spoofing counts as prohibited conduct.

Gregg Smith, Michael Nowak, and Christopher Jordan all claimed their fraud convictions had to be tossed because spoofing doesn’t involve a misrepresentation about an essential element of the bargain for futures contracts. Spoofing distorts market supply and demand, not the price or characteristic of the futures contract, so the other parties to the transactions got “exactly what they paid for,” they argued.

But neither wire fraud nor commodities fraud requires ...