It is hard to cheer for the Department of Justice these days, but federal prosecutions have begun to offer hope for precious metals investors hurt by rigged markets and crooked traders.
The DOJ looks poised to do what regulators at the CFTC have not. They will use evidence of blatant cheating and fraud to hold a few bankers accountable.
Last week, DOJ officials asked the judge in a civil suit against JPMorgan Chase to delay proceedings for 6 months to clear the path for more prosecutions.
Plaintiffs in that civil action have accused JPMorgan of ripping off investors based in part on evidence turned over by Deutsche Bank in 2016.
Deutsche Bank paid millions of dollars in fines and provided hundreds of thousands of documents plus dozens of voice recordings to settle its portion of the ongoing lawsuit.
Justice Department investigators, who may be using the same trove of information, would like to see a pause in the civil proceedings to “protect the integrity” of their ongoing criminal investigation.
Trader Has Turned State’s Evidence against JPMorgan, Others
DOJ’s request follows a key conviction last month. John Edmonds, a former JPMorgan metals trader, pleaded guilty to spoofing the metals markets and admitted he had done so with full awareness and support of his managers.
Edmonds, like Deutsche Bank, has agreed to cooperate and provide evidence implicating his superiors and other traders, both inside his bank and elsewhere.
Edmonds admitted to spoofing markets hundreds of times over 6 years, confirming what many gold and silver bugs have long known.
The precious metals markets are illegally manipulated by the bullion banks as a matter of routine and they have been doing it for a very long time.
Yes, the debate over whether or not there is price rigging in the metals markets is effectively over.
Now the debate over whether these rigged markets can be cleaned up begins. Edmonds will be sentenced for his crimes on Dec. 19th. The DOJ’s request for a 6-month delay of the civil suit implies that the agency expects to make real progress between now and the middle of next year.
